Systems, methods and program products for deposit and withdrawal processing

ABSTRACT

A method, system and program product, the method comprising: obtaining a plurality of net credit/debit amounts during a month period; generating data for depositing/transferring funds to or withdrawing/transferring funds from at least one of one or more aggregated deposit accounts multiple times in a month period, the data generating step comprising generating data for instructions for making a withdrawal/transfer from funds held at one of the one or more depository institutions more than six (6) times during the month period, comprising presenting instructions to the respective one depository institution using one or more of the methods: in person, or by mail, or, by messenger, or by telephone and distributed by mail, or by automated teller machine, or a combination thereof for substantially all of the withdrawals/transfers except for a set of at least one but not more than six withdrawals within the month period.

CROSS-REFERENCE TO RELATED PATENT APPLICATIONS

This application is a Continuation-In-Part of U.S. application Ser. No. 12/340,026, filed Dec. 19, 2008, which claims priority from Provisional Application U.S. Application 61/027,643, filed Feb. 11, 2008. This application is also a Continuation-In-Part of U.S. application Ser. No. 12/829,961, filed Jul. 2, 2010, which is a Continuation of U.S. application Ser. No. 11/689,247, filed Mar. 21, 2007. U.S. application Ser. No. 11/689,247 claims priority from Provisional Application U.S. Application 60/892,107, filed Feb. 28, 2007 and from Provisional Application U.S. Application 60/895,320, filed Mar. 16, 2007. All of the aforesaid applications are incorporated herein by reference in their entirety as if fully set forth herein.

This application incorporates by reference, in their entirety, but does not claim priority to U.S. Pat. No. 6,374,231, and application Ser. Nos. 09/677,535 filed Oct. 2, 2000, now U.S. Pat. No. 7,752,129; Ser. No. 10/071,053 filed on Feb. 2, 2002, now U.S. Pat. No. 7,519,551; Ser. No. 10/305,439 filed on Oct. 26, 2002, now U.S. Pat. No. 7,680,734; Ser. No. 10/382,946 filed on Mar. 6, 2003, now U.S. Pat. No. 7,536,350; Ser. No. 10/411,650 filed on Apr. 11, 2003, now U.S. Pat. No. 7,509,286; Ser. No. 11/641,046 filed on Dec. 19, 2006.

SUMMARY OF EMBODIMENTS

In one embodiment, a method is disclosed, comprising: (a) maintaining or having maintained or accessing, by one or more computers, an electronic database, on one or more computer readable media, comprising: (i) aggregated deposit account information for one or more of government backed-insured and interest-bearing aggregated deposit accounts, held in one or more depository institutions, comprising at least a first depository institution, each of the one or more aggregated deposit accounts holding funds of more than one client; (ii) client account information for a plurality of client accounts for a plurality of clients whose funds had been accepted for deposit in the names of the respective clients at the first depository institution; (b) obtaining a plurality of net credit/debit amounts during a month period, with each respective net credit/debit amount comprising a sum of credits to and/or debits with respect to multiple of the client accounts for a respective sub-period of the month; (c) generating data for depositing/transferring funds to or withdrawing/transferring funds from at least one of the one or more aggregated deposit accounts multiple times in a month period, based at least in part on one or more of the net credit/debit amounts for one or more sub-periods of time, the data generating step comprising generating data for instructions for making a withdrawal/transfer from funds held at one of the one or more depository institutions more than six (6) times during the month period, comprising presenting instructions to the respective one depository institution using one or more of the methods: in person, or by mail, or by messenger, or by telephone and distributed by mail, or by automated teller machine, or a combination thereof for substantially all of the withdrawals/transfers except for a set of at least one but not more than six withdrawals within a last six business days of the month period, and presenting instructions to the respective one depository institution using a method that counts against a 6 withdrawal limit for this set of the withdrawals during the last six business days of the month period; and (e) updating or having updated, by the one or more computers, the electronic database to reflect changes in client funds held in the one or more aggregated deposit accounts.

In a further embodiment, the instructions for withdrawal/transfer that count against a 6 withdrawal limit are presented in each of the last 5 business days of the month and are presented by electronic communication.

In a further embodiment, the government backed insurance is Federal Deposit Corporation Insurance.

In a further embodiment, the one or more depository institutions comprises only the first depository institution.

In a further embodiment, the one or more depository institutions comprise a plurality of depository institutions.

In a further embodiment, the one or more depository institutions comprise a plurality of depository institutions, and wherein the generating data for instructions to deposit/transfer funds to or withdraw/transfer funds from the one or more aggregated deposit accounts based at least in part on one or more of the net credit/debit amounts further comprises: transferring funds of a respective client only to one or more depository institutions which hold less than a specified amount of the funds of the respective client account.

In another embodiment, a method is disclosed, comprising: maintaining or having maintained or accessing, by one or more computers, one or more electronic databases, stored on one or more computer-readable media, comprising: (i) aggregated deposit account information for a plurality of respective government-backed insured and interest-bearing aggregated deposit accounts held in a plurality of depository institutions participating in a program, with the aggregated deposit accounts providing non-penalized liquidity for the funds held therein, each of the one or more aggregated deposit accounts holding funds of more than one client; and (ii) client account information for a plurality of client accounts, the client account information for a respective one of the client accounts comprising a balance of client account funds held in each of one or more of the aggregated deposit accounts holding funds of the respective client account; and accessing client account data comprising changes to client account funds sourced to the program from a plurality of source financial entities and held or to be held in the depository institutions in aggregated accounts held therein; allocating, by the one or more computers, fund amounts to the depository institutions to be held in the aggregated deposit accounts therein based at least in part on the client account data for the client account funds and one or more rules; generating data for depositing/transferring funds to or withdrawing/transferring funds from at least one of the aggregated deposit accounts multiple times in a month period, based at least in part on the accessed client account data, the data generating step comprising generating data for instructions for making a withdrawal/transfer from funds held at one of the depository institutions more than six (6) times during the month period, comprising presenting instructions to the respective one depository institution using one or more of the methods: in person, or by mail, or by messenger, or by telephone and distributed by mail, or by automated teller machine, or a combination thereof for substantially all of the withdrawals/transfers except for a set of at least one but not more than six withdrawals within a last six business days of the month period, and presenting instructions to the respective one depository institution using a method that counts against a 6 withdrawal limit for this set of the withdrawals during the last six business days of the month period; and updating or having updated, by the one or more computers, the one or more electronic databases to reflect changes in client account funds held in the aggregated deposit accounts.

In a further embodiment, the instructions for withdrawal/transfer that count against a 6 withdrawal limit are presented in the last 5 business days of the month and are presented by wire.

In a further embodiment, the method of presentation of the instructions for withdrawal/transfer that counts against the 6 withdrawal limit is by an electronic method.

In a further embodiment, one of the one or more rules for allocation comprises allocating funds of a respective client account only to one or more depository institutions which hold less than a specified amount of the funds of the respective client account.

In a further embodiment, one of the one or more rules for allocation comprises allocating funds to respective depository institutions so as not to exceed a maximum cap for the respective depository institution and/or not to go below a minimum cap for the respective depository institution.

In a further embodiment, one of the one or more rules for allocation comprises allocating funds to a respective one of the depository institutions based, at least in part, whether the one depository institution has sourced funds to the program which are held in one or more other of the depository institutions.

In a further embodiment, one of the one or more rules for allocation comprises allocating funds to a respective one of the depository institutions based, at least in part, on an amount of funds the one depository institution has sourced funds to the program which are held in one or more other of the depository institutions.

In a further embodiment, one of the one or more rules for allocation comprises allocating an amount of funds to a respective one of the depository institutions based, at least in part, on an amount of funds the one depository institution has sourced funds to the program which are held in one or more other of the depository institutions.

In a further embodiment, a step is performed comprising: allocating, using the one or more computers, fund amounts of client accounts among the aggregated deposit accounts, to substantially match the respective fund amounts allocated to the aggregated deposit accounts based at least in part on the client account data for the client account funds and one or more rules.

In a further embodiment, the method steps are performed by a self-clearing broker dealer, and wherein the accessing client account data comprises receiving deposit and/or withdrawal sweep data from one or more other broker dealers, with the deposit and/or withdrawal sweep data comprising deposit and/or withdrawal data for the respective customers holding customer accounts with the one or more broker dealers.

In a further embodiment, the self-clearing broker dealer performs the steps: maintaining the plurality of government backed-insured and interest-bearing aggregated accounts in the depository institutions, with at least one of the aggregated accounts at one of the depository institutions holding funds of multiple of the broker dealers; performing, by the one or more computers, an electronic accounting function on a substantially periodic basis based on client account data associated with the respective broker dealers, wherein the electronic accounting function is performed for the client accounts of the associated broker dealer based on the one or more parameters associated with the respective broker dealer or the respective customer.

In a further embodiment, the one or more accounting parameters comprise a type of rate to be paid one or more client accounts associated with the respective broker dealer.

In a further embodiment, the one or more accounting parameters comprise a tier of a rate chart to be paid on funds of client accounts associated with the broker dealer.

In a further embodiment, the one or more accounting parameters comprise one or more levels of FDIC insurance associated with client accounts associated with the respective broker dealer.

In a further embodiment, the one or more accounting parameters comprise one or more depository institutions that are associated with the client accounts associated with a respective one of the respective broker dealers for holding funds of those client accounts or are prohibited from holding funds of those client accounts.

In a further embodiment, the one or more accounting parameters comprise one or more of the depository institutions that are associated with only a subset of the broker dealers for holding funds of only the subset of the broker dealers or are prohibited from holding funds of the subset of the broker dealers.

In a further embodiment, the one or more accounting parameters comprise a preferred method for customer initiated/late day transactions.

In a further embodiment, a step is performed of replacing at least a portion of money withdrawn of one of the broker dealers from one of the depository institutions by depositing money from another of the broker dealers into the one depository institution.

In a further embodiment, the self clearing broker dealer maintains an accounting electronic database, on one or more computers, containing information on one or more accounting parameters to be applied when performing accounting functions relating to funds of a plurality of the client accounts of a plurality of the broker dealers.

In a yet further embodiment, a method is disclosed, comprising: maintaining or having maintained or accessing, by one or more computers, one or more electronic databases, stored on one or more computer-readable media, comprising: (i) aggregated deposit account information for a plurality of respective government-backed insured and interest-bearing aggregated deposit accounts held in a plurality of depository institutions participating in a program, with the aggregated deposit accounts providing non-penalized liquidity for the funds held therein, each of the one or more aggregated deposit accounts holding funds of more than one client; and (ii) client account information for a plurality of client accounts, the client account information for a respective one of the client accounts comprising a balance of client account funds held in each of one or more of the aggregated deposit accounts holding funds of the respective client account; and accessing client account data comprising changes to client account funds sourced to the program from a plurality of source financial entities and held or to be held in the depository institutions in aggregated accounts held therein; allocating, by the one or more computers, fund amounts to the depository institutions to be held in the aggregated deposit accounts therein based at least in part on the client account data for the client account funds and one or more rules; generating data for depositing/transferring funds to or withdrawing/transferring funds from at least one of the aggregated deposit accounts multiple times in a month period, based at least in part on the accessed client account data, the data generating step comprising generating data for instructions for making a withdrawal/transfer from funds held at one of the depository institutions more than six (6) times during the month period, comprising presenting instructions to the respective one depository institution using one or more of the methods: in person, or by mail, or by messenger, or by telephone and distributed by mail, or by automated teller machine, or a combination thereof for substantially all of the withdrawals/transfers except for a set of at least one but not more than six withdrawals within the month period, and presenting instructions to the respective one depository institution using a method that counts against a 6 withdrawal limit for this set of the withdrawals during the month period; and updating or having updated, by the one or more computers, the one or more electronic databases to reflect changes in client account funds held in the aggregated deposit accounts.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is schematic block diagram of one embodiment.

FIG. 2 is schematic block diagram of a flowchart of operations for one embodiment.

FIG. 3 is a schematic block diagram of an electronic system for implementing one or more of the embodiments of the invention.

FIG. 4 is a schematic block diagram of a further embodiment.

FIG. 5 is a schematic block diagram of a flowchart of operations for a further embodiment.

FIG. 6 is a schematic block diagram of a flowchart of operations for a further embodiment.

DETAILED DESCRIPTION OF THE EMBODIMENTS

The following terms used in this application are intended to have the meaning as described herein:

“aggregated account” comprises an account at a depository institution for holding funds for a plurality of clients from one or more financial entities. The aggregated account may be a segregated account that only holds the funds for a plurality of clients of a single financial entity that may or may not be self-clearing. Alternatively, the aggregated account may hold the assets for a plurality of clients of a plurality of financial entities which may utilize the clearing services provided by a self-clearing financial entity or a management institution, depending upon the program.

“broker dealer” is intended to take its ordinarily understood meaning in the art to cover entities offering programs such as brokerage advisors, investment advisors, broker dealers, management institutions and the like. A broker dealer may maintain one or more customer accounts on behalf of one or more customers for receiving funds deposited thereto, and for debiting checks or other financial instruments drawn against that account.

“self clearing broker dealer” is intended to take its ordinarily understood meaning in the art to cover broker dealers that perform clearing services for other broker dealers and/or for their own customers. Such clearing services could comprise ensuring the cash deposits from the other broker dealers were deposited in one or more program banks, performing accounting functions with respect to these incoming and outgoing funds, and performing or having performed reconciliation processing to determine for each of a plurality of customers, that a balance in a customer account after deposit and/or withdrawal transactions equals the amount associated with the respective customer in one or more of the program banks. Note that a self clearing broker dealer may only be a self clearing broker dealer (provide clearing services) for some transactions, and not for others. For example, a broker dealer could be a self clearing broker dealer only for cash, and not for equities transactions, or could be responsible for all or a subset of clearing functions except cash for his customers that participate in an insured deposits program, and could be for all customer accounts or a select group of accounts.

“holdback bank” is a bank that has agreed to a temporary withdrawal of funds from its account which may be later used to settle late day customer service and fee transactions, for example, cards/checks/ACH/fees, to name a few, that may be available for processing after the daily bank settlement deadline, typically 4:00 pm. The holdback withdrawal may be factored into the first runs and/or later runs of the bank allocation process on the sweep files, e.g., subtracted from credits to reduce the deposits to be allocated or added to debits to increase the dollar amount withdrawn from the holdback bank.

“program” is a deposit arrangement to obtain FDIC insurance for account balances over the FDIC insurance limit for a single account through the use of a plurality of aggregated accounts, with aggregated accounts in different program banks.

“program bank” is any bank, savings institution or other financial entity that holds an aggregated account in the program and that has government backed insurance.

“depository institution” means any institution which is authorized to accept deposits and issue certificates of deposit. This would include state and national banks, state and federal savings banks, savings and loan associations, credit unions, and probably some industrial loan companies, depending on current law. Most but not necessarily all, would have government backed-insurance, such as Federal Deposit Insurance Corporation (FDIC) insurance, or the National Credit Union Share Insurance Fund (NCUSIF) for credit unions, or state insurance.

“client account” refers to client funds, such as, for example, consisting of funds of the client designated or determined for management by the deposit management system, to be described.

In some deposit systems, one entity may play the role of one or more of the above. For example, a source financial entity, such as a bank, may also be a depository institution. Similarly, a source financial entity, like a broker-dealer, or a bank, may be affiliated with one or more of the depository institutions.

An administrator for program may be a source financial entity, a depository institution, a clearance bank, and/or another entity participating in deposit sweep functions or another managing entity. Likewise, a particular program may have one source financial entity or many source financial entities. Similarly, a particular program may have one depository institution or many depository institutions.

FIGS. 4, 5 and 6 illustrate embodiments with reference to the inventions described in application Ser. No. 10/071,053, now U.S. Pat. No. 7,519,551, and Ser. No. 10/382,946, now U.S. Pat. No. 7,536,350, that are incorporated by reference into this application. These embodiments are not limited to self clearing broker dealer operations, but use any type of source institution and may be performed by a variety of different entities.

In one embodiment, to a system and method is described for managing deposits and withdrawals from among a plurality of aggregated accounts held at a plurality of depository institutions in order to obtain government backed insurance above the limit set for individual accounts. In a further embodiment, the invention relates to a system and method for managing the transfer of client funds received from one or more financial entities by controlling the deposits to and withdrawals from among a plurality of aggregated accounts held at a plurality of depository institutions in order to obtain certain results. In one embodiment, the deposits and withdrawals are managed to strive to obtain balances in one or more aggregated accounts in one or more destination depository institutions associated with a financial entity(s) or program that are above the respective minimum caps for the respective deposit accounts at the different respective depository institutions. In a further embodiment, the deposits and withdrawals are managed to strive to obtain balances in one or more aggregated accounts held in one or more destination depository institutions associated with a financial entity(s) or program that fall between respective min and max caps for each respective aggregated account at the respective depository institutions. In yet a further embodiment, the deposits and withdrawals are managed to strive to obtain balances in a plurality of aggregated accounts associated with different programs but in the same depository institution, but managed by the same management institution, above a minimum cap associated with the depository institution. In a further embodiment, the deposits and withdrawals are managed to strive to obtain balances, that once reached in one or more aggregated account, are held stable with limited or no account activity.

In yet a further embodiment, the deposits and withdrawals from the deposit accounts are managed to ensure that no more than a predetermined amount, such as for example, $250,000, associated with a given client is held in any one depository institution. In a further embodiment, the deposits to and withdrawals from the aggregated accounts are managed to obtain a hold back amount to be used to cover late transactions after the closing time. In yet a further embodiment, a reconciliation process ensures that client balances reflected in the records maintained by financial entities for their participating clients are equal to the client balances reflected in a management institution's records for those same participating clients, and that aggregate balances maintained in aggregated accounts at respective depository institutions are in balance with an aggregate balance of the individual client balances reflected in the management institution records and the financial entity records. On a daily basis or other periodic basis, this reconciliation process in one embodiment includes comparing the aggregate balances for clients maintained by the management institution to the position maintained at the financial entity for each of its clients, comparing the aggregate balance at each depository institution maintained by the management institution to the actual aggregate balance at each depository institution, and in addition a control operating account in an intermediate bank used for facilitating fund transfers is reconciled to ensure the correct money movements as specified by the various depository institution allocations has taken place. In yet a further embodiment, the minimum and/or maximum caps are varied to manage the amount of net assets in an affiliated depository institution.

FIG. 4 is a block diagram, taken from Ser. No. 11/689,247 filed Mar. 21, 2007 that is incorporated by reference herein, of a system for allocating deposits to and withdrawals from aggregated accounts, generally designated by reference number 1, according to an exemplary embodiment of the present invention. The system 1 includes a number of financial entities FE1-FEn, each managing one or more programs, such as insured deposit products, for example. Each program may include one or more insured deposit products, each having different attributes, such as insurance level, different tier options and rates paid and services. In one embodiment, the rates paid may be determined by such factors as the balance in the client's insured account, or can be determined by the total value of the client's brokerage account, or determined by the total value of a group of accounts for a particular household together, or determined by relationship pricing based on the number of products a client uses though a financial entity or sister entities, to name a few. Each financial entity FE1-FEn may have a plurality of clients C1-Cm that invest in particular products that make up part of a particular program. The clients C1-Cm may be individuals or corporations or any other form of entity. Thus, for example, a financial entity FE1 may manage a number of programs designated in FIG. 1 as PROGRAM FE1-1, PROGRAM FE1-2, . . . PROGRAM FE1-p, where each client C1-Cm of the financial entity FE1 invests in at least one of the products under at least one of the programs PROGRAM FE1-1-PROGRAM FE1-p. Examples of different kinds of programs that may be offered, include a program with cash management services, a program for high net worth individuals with a higher minimum balance required, a program paying a lower rate and offering more services, a no frills program with a higher rate and no services, however for a fee the client could get other services, to name a few.

The system 1 also includes a number of depository institutions DI1-DIq, into which funds are deposited. Depository institutions DI1-DIq may be, for example, banks or credit unions, or other types of depository institutions. Preferably, at least some of depository institutions DI1-DIq are government backed insured, e.g., insurance from the Federal Deposit Insurance Corporation (FDIC). However, not all depository institutions need be government backed insured. For example, certain programs can also default to a money fund, or other uninsured deposit account, if the client's account balance is over the government backed insurance limit for that program. While the basic federal insurance amount is currently $250,000, more than $250,000 of coverage can be obtained if funds are maintained in different ownership categories, according to the FDIC. For example, coverage of up to $250,000 can be obtained for individual accounts at a depository institution, another $250,000 for each share of joint accounts at the same depository institution, and yet additional insurance for retirement accounts held at the same depository institution. Moreover, by depositing funds at more than one government backed insured depository institution, multiples of $250,000 of coverage can become protected by federal insurance. For example, if deposits are made to 10 government backed insured depository institutions, with no more than $250,000 for each ownership category deposited in each of said 10 government backed depository institutions, then $2,500,000 of effective federal insurance can be obtained for each ownership category.

In a variety of embodiments, direct deposits to and direct withdrawals from aggregated deposit accounts are performed. However, in one embodiment, a financial entity, or a management institution 10, acting as agent for the financial entity (to be discussed later) manages in each depository institution (e.g., bank or saving institution) an aggregate money market deposit account (MMDA) and an aggregate demand deposit account (DDA), both being in the identical name of financial entity, or its agent (referred to herein as an “MMDA-DDA pair”) or the like. In response to deposit and withdrawal transactions by or on behalf of clients, the financial entity or its agent initiates transfers of funds between the MMDA-DDA pairs, so that if the aggregate deposits of all clients for that financial entity or program exceed the aggregate client withdrawals (net client credit), then all or some of the funds may be deposited directly in the MMDA at the depository institution or, in an alternative embodiment, by way of the DDA in the MMDA-DDA pair. Conversely, if client withdrawals for all clients of that financial entity or Program exceed client deposits (net client debit), then the depository institution may be instructed by messenger or otherwise to transfer funds from the aggregate MMDA to the DDA.

As noted, the MMDAs are interest-bearing, insured deposit accounts, collectively in which the managed balances for clients are deposited. The DDAs, which are deposit accounts permitting an unlimited number of deposits and withdrawals, serve to facilitate the exchange of funds between the MMDAs, the depository institutions, and sources of client transactions (referred to herein as “transaction sources”). If the financial entity or the management institution 10 determines that it is necessary to move funds from a particular MMDA (at a particular depository institution), it first causes a messenger or otherwise to have these funds transferred from the MMDA to the DDA member of the MMDA-DDA pair, and second, causes the funds in the DDA to be moved to the financial entity's or its agent's own account or accounts. Then, from these accounts, funds may be further transferred to a third party, such as a transaction source or a customer financial entity (preferably by electronic or other automatic means). If funds are to be moved into a particular MMDA, the agent either may have them deposited into the associated DDA and then moved into the MMDA, or may have them deposited directly into the MMDA. The agent database is updated to reflect these funds transfers.

While in a preferred embodiment, a separate account or set of accounts, e.g., money market deposit accounts (MMDA), demand deposit account (DDA), are set up for each program for each financial entity, under certain embodiments of the present invention different programs of the same financial entity or different financial entities can be commingled and aggregated. Note that a financial entity does not have to set up a separate money market deposit account (MMDA) and associated demand deposit account (DDA) for each program at the depository institution, i.e., the same MMDA and/or DDA can be used across several programs if registered, e.g., in the name of and offered by the same self clearing financial entity or the like. Similarly, a single MMDA or other type of account can be set up at each depository institution, or more than two aggregated accounts can be set up at each depository institution. If a financial entity is a clearing firm that provides clearing services for other financial entities (correspondents), it is not necessary for the correspondents to set up a segregated MMDA and DDA for their respective programs. Note that it is not necessary for each financial entity, whether a bank or other entity, to set up segregated aggregated accounts at the depository institution. Rather a management institution 10 could act as an agent for a group of such financial entities so that assets for several financial entity banks or other entities can be held in the same MMDA and DDA registered in the name of the management institution at each depository institution DI1-Diq or the like. But if the same program is being offered by different financial entities, separate accounts are used for each financial entity that is a self clearing financial entity. Note that a self clearing financial entity is defined as a financial entity that provides clearing services for his clients only and/or provides clearing services for other financial entities that are not self clearing but correspondents of the self clearing financial entity. The deposits for the clients of the correspondent financial entities would be held in the self clearing financial entity's MMDA that is held in a depository institution associated with that self clearing financial entity. Thus, for example, if depository institution DI1 participates in three programs each run by a different self clearing financial entity, the depository institution DI1 may have three segregated aggregated accounts, each aggregated account associated with a different self clearing financial entity. The segregated aggregated accounts are preferably money market deposit accounts (MMDAs) registered in the name of the financial entity that manages the program associated with the MMDA or the like. However, any other suitable investment accounts may be used, such as NOW accounts for individuals, or DDA's. Moreover, more than one type of account could be used, e.g., an aggregated MMDA and an aggregated DDA at each depository institution. In some embodiments as noted above, a management institution 10 may be provided within the system 1 that could maintain account information for each of the financial entities (FE1, FE2, . . . FEn) and others in a database within its own system or have such a database maintained for its use.

In embodiments comprising a management institution, the management institution 10 is configured to allocate and manage deposits, withdrawals and other transactions relating to each of the accounts in each of the depository institutions DI1-DIq. Thus, the management institution tracks the net activity for the aggregated accounts maintained by the financial entity or the management institution 10 itself at the depository institutions DI1-DIq based on information sent from the financial entities FE1-FEn to the management institution 10 and/or from other appropriate sources via contract or otherwise. The management institution 10 maintains records or has maintained for it records on each financial entity and their respective clients with funds in depository institutions managed by the management institution 10, whether the financial entity is self clearing or not. Thus, in one embodiment, the management institution 10 maintains account records for all of the client accounts associated with the financial entities with funds managed by the management institution 10. As explained more fully below, the management institution 10 may automatically generate reports, for example in the form of e-mail messages, text messages, faxes, etc., advising the financial entities FE1-FEn of the day's net activity for a specific account in a specific depository institution DIq holding funds for that financial entity, and/or activity in one or more client accounts of that financial entity. If more than one account is maintained at a depository institution DI1-DIq, each account may be settled separately. The management institution 10 maintains or has maintained for it computer software and/or hardware 20 located at the management institution site, or at a remote site that is in communication with the management institution 10, that maintains databases and other program functions to track the activities in the various aggregated accounts in each depository institution DI1-DIq. Examples of such computer software and/or hardware will be discussed below.

An intermediary bank 30 may be incorporated as part of the system 1 to oversee and facilitate the transactions to and from the various aggregated accounts based on management institution 10 allocations. The intermediary bank 30 may either be the same as or separate from the management institution 10. In embodiments where the management institution 10 and the intermediary bank 30 are separate entities, they may be in substantially constant electronic communication. The intermediary bank 30 includes one or more control operating accounts, for example, one control operating account per self clearing financial entity. In one embodiment, the management institution 10 also maintains records of deposits, debits and balances for each client of a financial entity with funds in a control operating account, whether or not that financial entity is a self clearing financial entity. At the end of a period of time, such as 2-4 hours, or a day, for example, the balance of funds in each of the control operating accounts at the intermediary bank 30 are transferred to or from one or more of the depository institutions DI1-DIq. Note that in some embodiments where the self clearing FI's are not banks, self clearing financial entities use the intermediary bank to execute the wires, i.e., to send and receive wires/funds from the depository institutions.

According to various exemplary embodiments of the method of the present invention, each depository institution DI1-DIq may be assigned a minimum deposit cap (Min Cap), a maximum deposit cap (Max Cap), and an absolute cap (Absolute Cap). These caps are used to determine which depository institutions to select in an allocation process for a sweep file net deposit or withdrawal, to be discussed below. These caps may remain the same or be reset as appropriate.

“Min Cap” is the minimum deposit amount to be maintained either in a given aggregated account at a destination depository institution, or the minimum deposit amount to be maintained over a plurality of aggregated accounts at a destination depository institution. In one embodiment, the minimum cap may be negotiated for an individual aggregate account at a depository institution. If there is only one aggregated account at the depository institution, then this minimum pertains/is associated with the overall depository institution. In another embodiment, a management institution may manage a plurality of different programs for its customer financial entities, with each different program having a plurality of destination depository institutions for depositing funds thereamong for that program or financial entity, wherein there may be an overlap in the destination depository institutions of the programs. The management institution may then negotiate a minimum cap for the depository institution and split the minimum in its discretion between or among different aggregated accounts associated with the different programs at the same depository institution, and may alter that split on a real time basis in its discretion. The minimum deposit cap can be set to zero or greater. Accordingly, when allocating deposits to the depository institutions for a given financial entity and/or program, the allocation process will attempt to satisfy the minimum deposit cap associated with the aggregated account for that financial entity and/or program at the destination depository institution. In an embodiment, the allocation process may allocate withdrawal of funds first from aggregated accounts held in destination depository institutions for that financial entity and/or program that have balances above their respective minimum deposit caps before it allocates withdrawal of funds from aggregated accounts held in destination depository institutions for that financial entity and/or program that are at or below their respective minimum deposit caps. Note that the Min Cap can be set using a variety of factors. As noted, the Min Cap at a depository institution may be associated with a single aggregated account of a financial entity and/or program. Thus, there may be a different respective Min Cap associated with each different financial entity with an aggregated account registered at that depository institution. In an alternative embodiment, as noted above, the Min Cap may be negotiated with a management institution 10 and may cover the aggregate of all of the funds managed by that management institution in aggregated accounts in that depository institution. Thus, the management institution would attempt to ensure that a certain stable minimum amount of total assets managed by the management institution were maintained at that depository institution

“Max Cap” is the maximum deposit amount that is to be maintained either in a given aggregated account at a destination depository institution, or the maximum deposit amount to be maintained over a plurality of aggregated accounts, each associated with a different financial entity and/or program, at a destination depository institution. The system will allocate deposits to respective aggregated accounts held in destination depository institutions associated with the given financial entity and/or program that are below their respective Max Caps in an order that is set by rule for deposits. As with the Min Cap, the Max Cap may be one associated with a single aggregated account of a single financial entity. Alternatively, the Max Cap may be the aggregate dollar amount the management institution 10 has approved for the particular depository institution to be split among a plurality of the aggregated accounts at that depository institution, or a lesser amount set by that depository institution for all of the accounts managed by the management institution 10. In one embodiment, the Max Cap is set based on a credit policy. In this embodiment, before a depository institution is added to the deposit system of the present invention, the management institution 10 performs a credit check and determines if the depository institution meets predetermined credit standards required by the financial entity associated with that aggregated account, or alternatively required by a management institution credit policy. The management institution 10 then approves each depository institution for a specific aggregate deposit amount that is either associated with a given aggregated account at the depository institution, or with the overall depository institution. This amount may be changed over time as circumstances require. The Max Cap thus functions in this embodiment as a safety cap to ensure that the system does not allocate a deposit to an aggregated account at the depository institution that will push it over the Max Cap. As noted above, at times the depository institution will request a lower deposit max cap.

“Absolute Cap” is the maximum deposit amount approved for either the aggregated account held in a destination depository institution or for the depository institution itself. The absolute cap can be greater than or equal to the Max Cap. In situations where some or all of the aggregated accounts are at or over their respective Max Caps, the system may allocate deposits to aggregated accounts or to depository institutions above their respective Max Caps up to an Absolute Cap that should not be exceeded.

“Min=Max” if the min and max cap are equal, the aggregated account held in the destination depository institution is preferably bypassed by the allocation process once deposits from a given financial entity and/or program reach the level of the Min=Max Cap. It is intended that such aggregated account held in the depository institution, after its balance of assets is at or above it Min Cap, shall have virtually no activity, other than the posting of interest at month end. The allocation process is designed to access the funds in these depository institutions only if there is no other option. The allocation process automatically allows for minimal increases in the Max Caps at month end to allow for interest posting. Note that other methods of preventing transfers to or from an aggregated account or a depository institution are further described later.

The management institution 10 may be designed to run two allocation processes: a depository institution allocation process, which allocates funds between/among the depository institutions DI1-DIq, and a client account balance allocation (to be discussed later). Referring to the depository institution allocation process, as explained in further detail below, this allocation process may serve one or more of several purposes, such as, for example, to maintain substantially stable deposit funds at a depository institution by a financial entity or a management institution by limiting deposit/withdrawal activity, to ensure that activity at the depository institutions DI1-DIq complies with federal regulations such as FDIC regulations, to ensure compliance with a credit policy, and to insure compliance with specific rules set by the client, the Financial entity, or the branch, to name a few.

With reference to the Min=Max cap parameter, the inventors have recognized that depository institutions are more willing to accept large deposits if the management institution can guarantee substantial stability, with limited activity. If the account has substantial activity it becomes a burden to the depository institution. Minimization of deposit and withdrawal activity also makes reconciliation easier for the given financial entity maintaining funds in that depository institution, since it may be less costly if the financial entity and/or the management institution 10 is not sending wires every day to every depository institution. Additionally, deposit/withdrawal minimization reduces the people resources needed to administer the various program.

In one embodiment, the depository institution allocation process through the use of the Min Cap, may try to bring the balance in each aggregated account at the depository institutions up to at least a minimum deposit cap. This minimum deposit cap may be negotiated based on a variety of business and banking concerns such as a minimum level of stable assets maintained by a financial entity or program or the management institution at the depository institution, or the depository institutions overall need for deposits to cover loan activity, and minimization of deposit/withdrawal activity, as discussed above.

As noted above, a maximum deposit cap, Max Cap, may also be set for the particular depository institution for various reasons including maintaining a credit policy, and controlling a level of activity in a transaction account.

The depository institution allocation process may be set to minimize activity for that aggregated account after the balance in the account has reached the Min Cap, via by-passing withdrawals or credits to that depository institution account by setting the minimum deposit cap equal to the maximum deposit cap. Alternatively, other methods of flagging accounts that should remain unchanged as a result of net daily activity can be used as the equivalent of setting the maximum deposit and the minimum deposit to be equal. For example, a flagging method may comprise determining if a flag such as a data field has been set in the system or a database indicates whether to avoid withdrawing funds from or depositing funds to the different one of the aggregated accounts, or if a rule is currently in operation to avoid withdrawing funds from or depositing funds to the different one of the aggregated accounts. In one embodiment, this data field or rule may be associated with a given day, set of days, week, etc., and may indicate that no withdrawals are to take place for the designated periods. Alternatively, such a flag or rule may indicate that no deposit or withdrawal activity is to take place with respect to the particular aggregated account. Note that in one embodiment, deposit and/or withdrawal activity may be directed to or away from a given aggregated account using minimum caps, maximum caps, flags, rules, and various combinations thereof.

In some instances, the allocation process may not be able to by-pass a particular depository institution for withdrawals, such as when a by-pass is in conflict with set parameters or a client has a withdrawal that is only attached to the particular depository institution. In this case, the depository institution allocation process will allow the withdrawal but attempt to replace the dollar amount withdrawn with an offsetting credit from one or more other clients of that financial entity with funds in an aggregated account at a different depository institution associated with that financial entity, and/or in some instances simply with funds from another depository institution managed by the management institution 10. Accordingly, the process reallocates funds from one or more aggregated accounts attached to other depository institutions. Thus, the net activity for the depository institution in which the withdrawal should have been by-passed is at or about zero.

The second allocation process is the client account balance allocation. In this allocation, the client account balances are reshuffled/reallocated at some convenient time, to match the allocation to each depository institution determined above. Thus, individual client balances for clients of a given financial entity FE1 or its correspondents can be shuffled/allocated to aggregated accounts in different depository institutions. In one embodiment, the management institution 10 reshuffles by following individual client account business rules, and financial entity and correspondent and branch business rules (examples will provided below), and then the remaining client accounts are reshuffled/allocated beginning with the client account of the financial entity or correspondent (in the case of co-mingled accounts) with the highest balance and progressing to the client account with the lowest balance. The reallocation alternatively can be performed from the lowest account balance to the highest account balance, or in any other convenient sequence. In the example, the depository institution DI1 with its aggregated account having its Min Cap=and Max Cap would not be debited for the $50,000 client withdrawal. Rather, the client account balances would be reshuffled among depository institutions to allocate sufficient balances from other depository institutions associated with financial entity FE1 either directly or through a correspondent relationship to ensure that the aggregate amount on deposit remains unchanged at the depository institution DI1.

The transferring of funds from the financial entity to one or more depository institutions may be performed, in one embodiment, by way of an intermediary bank 30 which may or may not be associated with the management institution 10. This movement/distribution of the funds may be accomplished before or after the reshuffling of client account balances process. In one embodiment, a deposit of the funds to the depository institutions may be accomplished by sending, by any convenient mode of communication, e.g., wire, email, telephone, mail, etc., an order to the intermediary bank 30 to transfer funds to selected destination depository institutions DI associated with the financial entity and/or program in the amounts prescribed. For debits, in one embodiment, a wire or other convenient mode of communication may be sent by the management institution 10 or a self clearing financial entity depending on whether or not the accounts are segregated, to a messenger service to have a messenger deliver a transfer form sent to the depository institution to cause it to withdraw funds. In this manner, a debit of funds is made from selected depository institutions associated with financial entity in amounts prescribed. Other known or future developed techniques for delivering funds may also be used.

In an embodiment of the invention, the allocation process may also be used to ensure that the depository institutions DI1-DIq comply with FDIC regulations. For example, federal regulations currently prohibit more than six withdrawals from interest bearing demand accounts during a monthly period using certain withdrawal techniques.

Referring to FIG. 5, block 500 represents an operation of maintaining or having maintained or accessing, by one or more computers, an electronic database, on one or more computer readable media, comprising: (i) aggregated deposit account information for one or more of government backed-insured and interest-bearing aggregated deposit accounts, held in one or more depository institutions, comprising at least a first depository institution, each of the one or more aggregated deposit accounts holding funds of more than one client; and (ii) client account information for a plurality of client accounts for a plurality of clients whose funds had been accepted for deposit in the names of the respective clients at the first depository institution. Note that in one embodiment, the government backed insurance is from the Federal Deposit Insurance Corporation.

Block 510 represents an operation of obtaining a plurality of net credit/debit amounts during a month period, with each respective net credit/debit amount comprising a sum of credits to and/or debits with respect to multiple of the client accounts for a respective sub-period of the month. This element may be performed by receiving or accessing data for net credit/debit amounts comprising a sum of credits to and/or debits from multiple of the client accounts. Alternatively, this element may be performed by obtaining deposit and/or withdrawal sweeps, or individual item data or net data for individual client accounts, and then calculating a net credit/debit amount. Data may be received or accessed electronically, or may be received by telephone, or by facsimile, and then keyed into the one or more databases of the system. The method by which this data is obtained is not limiting on the invention.

Block 520 represents an operation of generating data for depositing/transferring funds to or withdrawing/transferring funds from at least one of the one or more aggregated deposit accounts multiple times in a month period, based at least in part on one or more of the net credit/debit amounts for one or more sub-periods of time. The data generating step comprises generating data for instructions for making a withdrawal/transfer from funds held at one of the one or more depository institutions more than six (6) times during the month period, comprising presenting instructions to the respective one depository institution using one or more of the methods: in person, or by mail, or by messenger, or by telephone and distributed by mail, or by automated teller machine, or a combination thereof for substantially all of the withdrawals/transfers except for a set of at least one but not more than six withdrawals within the month period, and presenting instructions to the respective one depository institution using a method that counts against a 6 withdrawal limit for this set of the withdrawals during the month period. In one embodiment, the set of at least one but not more than six withdrawals within the month period is from the last six business days of the month period, and instructions are presented to the respective one depository institution using a method that counts against a 6 withdrawal limit for this set of the withdrawals during the last six business days of the month period. In one embodiment, the instructions for withdrawal/transfer that count against a 6 withdrawal limit are presented in the last 5 business days of the month and are presented by electronic communication. In another embodiment, the presentation of the instructions is made using a method that counts against the 6 withdrawal limit only on a selected day of the week, e.g., only on Mondays, or only on Fridays. In another embodiment, the presentation of the instructions is made using a method that counts against the 6 withdrawal limit only in a selected week of the month, e.g., the first week of the month. In another embodiment, the presentation of the instructions made using a method that counts against the 6 withdrawal limit is intermingled during the month. In one embodiment, the presentation of the instruction that counts against the 6 withdrawal limit is by wire. As noted, the 6 withdrawal limit referenced is set by U.S. federal banking regulation.

Block 530 represents an operation of updating or having updated, by the one or more computers, the electronic database to reflect changes in client funds held in the one or more aggregated deposit accounts.

In one embodiment, the one or more depository institutions holding one or more aggregated deposit accounts comprises only the first depository institution. This embodiment allows a depository institution to maintain funds of its customers on its balance sheet, provide government backed insurance, and permit unlimited number of withdrawals in a month. In a further embodiment, the one or more depository institutions comprise a plurality of depository institutions.

In a further embodiment, the one or more depository institutions comprise a plurality of depository institutions, and the generating data for instructions to deposit/transfer funds to or withdraw/transfer funds from the one or more aggregated deposit accounts based at least in part on one or more of the net credit/debit amounts further comprises the operation of transferring funds of a respective client only to one or more depository institutions which hold less than a specified amount of the funds of the respective client. For example, the specified amount may be equal to or less than an FDIC insurance limit for an individual account.

As noted, these embodiments may be implemented with a variety of different source institutions. However, in one embodiment, there are a plurality of depository institutions holding aggregated deposit accounts, and the method steps are performed by a self-clearing broker dealer, and wherein the accessing client account data comprises receiving deposit and/or withdrawal sweep data from one or more other broker dealers, with the deposit and/or withdrawal sweep data comprising deposit and/or withdrawal data for the respective clients having client accounts with the one or more broker dealers.

As noted, these embodiments may be implemented with a variety of different source institutions. However, in one embodiment, a self-clearing broker dealer may perform the steps of maintaining the plurality of government backed-insured and interest-bearing aggregated accounts in the plurality of depository institutions. In at least one embodiment, at least one of the aggregated accounts at one of the depository institutions holds funds of multiple of the broker dealers. The self-clearing broker dealer may also perform, by the one or more computers, an electronic accounting function on a substantially periodic basis based on client account data associated with the respective broker dealers, wherein the electronic accounting function is performed for the client accounts of the associated broker dealer based on the one or more parameters associated with the respective broker dealer or the respective customer. Examples of such parameters have been previously described.

Referring to FIG. 6, an implementation of a further embodiment of the invention is disclosed. Block 600 comprises an operation of maintaining or having maintained or accessing, by one or more computers, one or more electronic databases, stored on one or more computer-readable media, comprising: (i) aggregated deposit account information for a plurality of respective government-backed insured and interest-bearing aggregated deposit accounts held in a plurality of depository institutions participating in a program, with the aggregated deposit accounts providing non-penalized liquidity for the funds held therein, each of the one or more aggregated deposit accounts holding funds of more than one client; and (ii) client account information for a plurality of client accounts, the client account information for a respective one of the client accounts comprising a balance of client account funds held in each of one or more of the aggregated deposit accounts holding funds of the respective client account.

Block 610 comprises an operation of accessing client account data comprising changes to client account funds sourced to the program from a plurality of source financial entities and held or to be held in the depository institutions in aggregated accounts held therein. In one embodiment, this data may comprise sweep data, and/or data for individual transactions or nets thereof, from source financial entities such as banks, credit unions, other types of depository institutions, registered investment advisors, broker dealers, asset managers, trust companies, retirement programs, other financial entities or intermediaries, to name a few.

The accessing operation may be performed by receiving or accessing data for net credit/debit amounts comprising a sum of credits to and/or debits from multiple of the client accounts. Alternatively, this element may be performed by obtaining deposit and/or withdrawal sweeps, and/or individual item data or net data for individual client accounts, and then calculating a net credit/debit amount. Data may be received or accessed electronically, or by telephone, or by facsimile, and then keyed into the one or more databases of the system. The method by which this data is obtained is not limiting on the invention.

One or more intermediary institutions may be used to facilitate the movement of funds between the one or more source financial entities and the depository institution(s) and/or to perform various recordkeeping functions. Such intermediaries may perform record keeping and/or fund transfer functions, and may include a bank or clearance bank through which fund transfers may be facilitated, a clearing firm, an administrator that performs recordkeeping functions and/or provides data to facilitate fund transfers, and/or other entities that perform fund transfer or recordkeeping functions. Note that multiple entities may also fulfill a single function or roll.

As noted above, in some deposit systems, one entity may play the role of one or more of the above. For example, a source financial entity, such as a bank, may also be a depository institution. Similarly, a source financial entity, like a broker-dealer, or a bank, may be affiliated with one or more of the depository institutions.

The present invention may be used in the context of these or other fund movement systems.

Block 620 comprises an operation of allocating, by the one or more computers, fund amounts to the depository institutions to be held in the aggregated deposit accounts therein based at least in part on the client account data for the client account funds and one or more rules. Note that a variety of rules may be applied in allocating the funds among the first plurality of depository institutions. For example, one rule comprises allocating funds to respective depository institutions so that funds held in the one or more aggregated deposit accounts in the respective depository institution do not exceed a maximum cap set for the respective depository institution, and/or to ensure that funds held in the one or more aggregated deposit accounts in a respective depository institution do not go below a minimum cap. Another rule may be based on allocating funds based on a depository institution stability rating. Another rule may allocate in order to minimize fund transfers into and/or out of the one or more aggregated deposit accounts held in the respective depository institution for a period of time. Another rule may allocate funds based on obtaining or retaining government backed insurance, e.g., allocating funds of a respective client account only to depository institutions which hold less than a specified amount of the funds of the respective client account. Another rule may be to allocate funds to a respective one of the depository institutions, based at least in part on whether the one depository institution has sourced funds to the program which are held in one or more other of the depository institutions. Another rule may be to allocate funds to a respective one of the depository institutions, based at least in part, on an amount of funds the one depository institution has sourced funds to the program which are held in one or more other of the depository institutions.

Block 630 comprises an operation of generating data for depositing/transferring funds to or withdrawing/transferring funds from at least one of the aggregated deposit accounts multiple times in a month period, based at least in part on the accessed client account data, the data generating step comprising generating data for instructions for making a withdrawal/transfer from funds held at one of the depository institutions more than six (6) times during the month period, comprising presenting instructions to the respective one depository institution using one or more of the methods: in person, or by mail, or by messenger, or by telephone and distributed by mail, or by automated teller machine, or a combination thereof for substantially all of the withdrawals/transfers except for a set of at least one but not more than six withdrawals within the month period, and presenting instructions to the respective one depository institution using a method that counts against a 6 withdrawal limit for this set of the withdrawals during the month period. Any of the embodiments disclosed previously for element 530 may be implemented here. For example, in one embodiment, the set of at least one but not more than six withdrawals within the month period may be from the last six business days of the month period, and instructions may be presented to the respective one depository institution using a method that counts against a 6 withdrawal limit for this set of the withdrawals during the last six business days of the month period. In one embodiment, the instructions for withdrawal/transfer that count against a 6 withdrawal limit are presented in the last 5 business days of the month and are presented by electronic communication, such as by wire. For example, a last 6 withdrawals, or a last 5 withdrawals, or a last 4 withdrawals, etc., may be presented to the depository institution by wire, or other electronic communication method during this period.

Block 640 comprises an operation of updating or having updated, by the one or more computers, the one or more electronic databases to reflect changes in client account funds held in the aggregated deposit accounts.

As noted previously, the government backed insurance may be from the Federal Deposit Corporation Insurance. These embodiments may be implemented with a variety of different source institutions. However, in one embodiment, the method steps may be performed by a self-clearing broker dealer, and the accessing client account data comprises receiving deposit and/or withdrawal sweep data from one or more other broker dealers, with the deposit and/or withdrawal sweep data comprising deposit and/or withdrawal data for the respective clients having client accounts, which clients are associated with and are also customers of the one or more broker dealers. In one embodiment, the self-clearing broker dealer may also perform the steps of maintaining the plurality of government backed-insured and interest-bearing aggregated accounts in the depository institutions. In one embodiment, at least one of the aggregated accounts at one of the depository institutions may hold funds of multiple of the broker dealers. The self clearing broker dealer may also perform, by the one or more computers, an electronic accounting function on a substantially periodic basis based on client account data associated with the respective broker dealers, wherein the electronic accounting function may be performed for the client accounts of the associated broker dealer based on the one or more parameters associated with the respective broker dealer or the respective customer.

By way of example, one of the accounting parameters may comprise a type of rate to be paid one or more client accounts associated in the one or more databases with the broker dealer. In another embodiment, one of the accounting parameters may comprise a tier of a rate chart to be paid on funds of client accounts associated with the broker dealer based on a broker dealer rate parameter. In another embodiment, one of the accounting parameters may comprise one or more levels of FDIC insurance associated with different client accounts of the respective broker dealer. In another embodiment, one of the accounting parameters may comprise one or more depository institutions that are associated with the client accounts associated with the respective broker dealer for holding funds of those client accounts or are prohibited from holding funds of those client accounts. In another embodiment, one of the accounting parameters may comprise one or more of the depository institutions that are associated with only a subset of the broker dealers for holding funds of client accounts associated with only the subset of the broker dealers or are prohibited from holding funds of the subset of the broker dealers. In another embodiment, one of the accounting parameters may comprise a preferred method for customer initiated/late day transactions.

In a further embodiment, an operation may be performed of replacing at least a portion of money withdrawn of one of the broker dealers from one of the depository institutions by depositing money from another of the broker dealers into the one depository institution.

In a further embodiment, the self clearing broker dealer may maintain an accounting electronic database, on one or more computers, containing information on one or more accounting parameters to be applied when performing accounting functions relating to funds of a plurality of the client accounts of a plurality of the broker dealers.

In a further embodiment, an operation is performed of allocating, using the one or more computers, fund amounts of client accounts among the aggregated deposit accounts, to substantially match the respective amounts allocated to the aggregated deposit accounts based at least in part on the client account data for the client account funds and one or more rules.

In a yet further embodiment, a problem has been discovered when providing FDIC insurance for large single accounts by allocating funds across multiple program banks In current implementations separate aggregated accounts are set up for each different broker dealer at a plurality of the program banks But, many program banks are not interested in opening or maintaining such an aggregated account where the balance is less then some amount, e.g., $1-5 million. Part of the reason for this reluctance on the part of the program banks is the expense involved in maintaining the aggregated account for such a small amount coupled with attendant accounting issues. The accounting processing necessary for a broker dealer BD_(i) having multiple customers is cumbersome and resource intensive. Another reason for this reluctance is the instability in the account balance that seems to flow from the size of the broker dealer BD_(i). Note that this issue is particularly acute for self clearing broker dealers with a limited clientele with one or a few large customer accounts of, for example, $1,000,000. Insuring $1,000,000 with FDIC insurance would require a minimum of ten program banks, each holding the current FDIC limit for insurance from the large customer account. But a self clearing broker dealer with a limited clientele would not have enough funds from other of its customers to disperse among the ten program banks to make it profitable for the ten banks to service their respective program accounts. Also, such small balances tend to be less stable due to fund transfers of the broker dealer customers, e.g., it is difficult to maintain a stable level of assets at the bank. When this problem of finding FDIC insured banks to operate as program banks for such a small self clearing broker dealer is coupled with the accounting function now required for self clearing broker dealers, the situation for such small self clearing broker dealers becomes in many cases, untenable. Accordingly, it may be difficult to find program banks that will open a separate aggregated account for $1-5 million for a small broker dealer BD_(i). Moreover, if a program bank does agree to maintain an aggregated account for such a small amount, the rate of interest it will agree to pay may be less than other significantly larger accounts.

FIG. 1 illustrates one embodiment of the invention wherein a self clearing broker dealer 100 provides an insured deposit program that causes sweep funds received at one or more intermediary banks 110 associated with the self clearing broker dealer, which funds represent deposits and withdrawals for customers of multiple other broker dealers BD₁-BD_(n), to be allocated to and invested in aggregated accounts in a plurality of program banks 130-140 to thereby obtain FDIC insurance for single large accounts of over the current FDIC limit for insurance. Additionally, accounting functions are provided relating to deposits and withdrawals for the individual customer accounts of the broker dealers BD_(1-n) and clearing reconciliation calculations are performed for the fund transfers. Note that in some embodiments, the intermediary bank 110 may function not only as the intermediary, but also as a program bank.

FIG. 1 illustrates the overall system and process for one embodiment. Each of lines 118 _(1-n) illustrates the communication of one or more sweep files comprising credit and debit transactions of customers associated with the respective broker dealers BD_(1-n) to the self clearing broker dealer 100. One or more settlement communication occur between a given broker dealer BD_(i) and the self clearing broker dealer 100 to determine a net of aggregated credit and debit transactions of the customers of that broker dealer BD_(i). The lines 115 _(1-n) in one direction represent fund transfers (typically by wire) from the respective broker dealers BD_(1-n) to the intermediary bank 110 in the situation where the net of the customer credits and debits is determined in the settlement to be a net credit. Lines 140 _(1-n) in one direction represent the path for the wiring or other means of depositing funds to one or more of the program banks 130-140 in the situation where the settlement is a net credit. These lines 140 _(1-n) in the other direction also represent the path for the movement of withdrawn funds from the program banks 130-140 to the control operating account at the intermediary bank 110, for dispersal to the appropriate broker dealer BD_(i) via the lines 115 _(1-n) in the case of a net withdrawal of funds. The lines 125 _(1-n) represent the communication between the self clearing broker dealer 100 and the program banks 130-140 regarding the deposit of funds to or the withdrawal of funds from one or more of the program banks. In the situation where the settlement has determined that there is a net debit to be satisfied, one or more different methods of communication may be used to provide instructions for withdrawals (to be discussed below). Details of the electronic system for implementing the self clearing broker dealer 100 will be discussed in relation to FIG. 3.

Referring now to FIG. 2, an embodiment of operations at the self clearing broker dealer 100 are illustrated. Block 200 illustrates an operation of maintaining or having maintained a separate account for each of a plurality of customers of a plurality of broker dealers BD_(1-n).

Block 210 illustrates an operation of receiving by the self clearing broker dealer 100 deposit and/or withdrawal sweep data representing one or more cash sweep fund deposits and/or withdrawals associated with one or more of the plurality of broker dealers BD_(1-n), with the deposit sweep data and/or withdrawal sweep data comprising deposit and withdrawal data for the respective customers of the one or more broker dealers BD_(1-n). In one embodiment, this receiving operation would be performed by one or more computers over a network.

In one embodiment, the sweep data comprises fund deposit data for cash deposited by or for customers of the respective broker dealer BD_(i) and withdrawals of funds to satisfy credit card or debit card or checking or other withdrawal activity of individual customers of the respective broker dealer BD_(i). The sweep file will typically comprise customer activity from a single broker dealer BD_(1-n) but could comprise a composite of deposit and withdrawal activity for customers of multiple broker dealers BD_(1-n). In one embodiment, a settlement would be determined between the self clearing broker dealer 100 and the broker dealer BD_(i) of a net amount comprising a net of the deposit and withdrawal data from the customers of the broker dealer BD_(i). If the net amount is a credit, then the amount of the credit is wired by the broker dealer BD_(i) to a control operating account in the intermediary bank 110. This deposit sweep data indicates that a net of customer deposits (excess cash in the customer accounts of the particular broker dealer BD_(i)) and withdrawals for the particular broker dealer BD_(i) results in a net deposit. Alternatively, if the net amount determined in the settlement is a debit, then such a net withdrawal would be satisfied by withdrawal from one or more program banks (to be discussed below).

Block 220 illustrates an operation of maintaining a plurality of FDIC-insured and interest-bearing aggregated accounts at a plurality of different program bank 130-140, with each program bank holding at least one of the aggregated accounts, with at least one of the aggregated accounts at one of the program banks holding funds of a plurality of broker dealers BD_(1-n). Details of the aggregated accounts will be provided below. In one embodiment, the aggregated account may comprise a single money market deposit account (MMDA). Alternatively, there may be two aggregated accounts, an MMDA paired with a demand deposit account (DDA). Alternatively, there may be a single aggregated NOW account for individuals. Alternatively, there may be an aggregated NOW account paired with an aggregated MMDA. Alternatively, there may be an aggregated NOW account for individuals paired with an aggregated MMDA and a DDA for institutional customers paired with the same MMDA.

Block 230 illustrates an operation of maintaining and/or accessing by one or more computers an aggregated account electronic database containing information on funds of each of a plurality of the customers held in the plurality of aggregated deposit accounts.

Block 240 illustrates an operation of maintaining and/or accessing by one or more computers an accounting electronic database containing information on one or more accounting parameters to be applied when performing accounting functions relating to funds of the customers of the broker dealers BD_(1-n). Examples of such accounting parameters will be discussed below.

Block 245 illustrates an operation of making, by one or more computers, information accessible over the Internet to respective customers of one or more of the broker dealers on funds in the respective customer's account. In one embodiment, this information could be provided by populating a web page designated and/or customized for that customer alone, with data on the funds in the respective customer's account. Such information could comprise a balance in the respective customer's account, and/or information identifying the one or more program banks holding funds of the respective customer. In one embodiment, the web pages, with one or more such pages customized for each customer, would be provided on a Web server and made accessible by means of a customer browser, using ID and password controlled access. The information could be updated on the respective web page of the customer periodically, or upon customer access to his/her respective web page. The Web server could further be configured to allow the respective customers to deposit funds to and/or withdraw funds from their respective customer accounts via the Web access. In another embodiment, this information could be provided by sending or making accessible, periodically or upon request, or upon access to the database, an email or other electronic communication to a customer electronic appliance, such as a computer, or PDA, or cell phone.

Block 250 illustrates an operation of determining by one or more computers, in the case of receiving in block 210 fund data resulting in a net credit, an allocation of funds to one or more of the plurality of FDIC-insured and interest-bearing aggregated accounts at one or more of the aggregated accounts in the program banks 130-140, so that FDIC insurance coverage greater than the maximum FDIC insurance coverage allowed for a depositor for a single account is effectively provided for at least one customer, and for determining in the case of receiving in block 210 sweep data resulting in a net debit, an allocation of one or more withdrawals of funds from one or more program banks 130-140.

Block 260 illustrates an operation of providing by the self clearing broker dealer 100, in the case of a net credit from the sweep data, at least one instruction to the intermediary bank 110 for execution to cause funds to be deposited to one or more of the FDIC-insured interest-bearing aggregated accounts based on the allocation of funds determined in block 250. Likewise, in the case of a net debit from the sweep data, providing by the self clearing broker dealer at least one instruction to at least one of the program banks 130-140 to withdraw funds from its FDIC-insured interest-bearing aggregated account based on the allocation of the withdrawal of funds determined in block 250.

Block 270 illustrates an operation of performing by the self clearing broker dealer by one or more computers an electronic accounting function on a substantially periodic basis based on deposit and withdrawal data of the customers of the respective broker dealers BD_(1-n), and performing interest calculations pertaining to funds of those customers, wherein the accounting function is performed for the customers of the associated broker dealers BD_(i) based on the one or more parameters in the electronic accounting database associated with respective broker dealer BD_(i) and/or the customer. In one embodiment, the accounting function comprises a record keeping function, whereby the system maintains a history for each customer account, which history includes transactions, interest earned and the program banks 130-140 holding funds of the particular customer account. A determination is made as to what customer account funds are held at which one or more program banks 130-140. One or more reports for the program banks and the respective broker dealers BD_(1-n) may then be generated detailing which accounts have funds held at which program bank and in what amount.

In some embodiments the interest calculation can be fairly complex. For example, the system may track the aggregate interest distributed to customers of the broker dealers BD_(1-n) from each aggregate account at a program bank and the revenue or fee to be paid to the self clearing broker dealer 100. For example, a given program bank may pay a fixed rate for funds for some predetermined period of time. However, the money in the aggregated account at the program bank may include funds from several broker dealers BD aggregated together by the self clearing broker dealer, with each broker dealer BD_(i) entitled to a different rate of interest based on their respective agreement with the self clearing broker dealer. For example, a tiered interest rate based on the total amount of funds provided to the self clearing broker dealer could be used. Each customer of the given broker dealer BD_(i) could likewise be earning a different interest rate from the broker dealer BD_(i) based on the customer's agreement with the given broker dealer BD_(i) (which also could be based on a tiered set of interest rates). Accordingly, the different broker dealers BD_(1-n) could each be earning a different interest rate and the different customers of these different broker dealers BD_(i) could each be earning a different interest rate for the same aggregated account at a program bank. Thus, it is possible to have one customer that is earning 3% and another customer earning 3.5% in the same aggregated account at a program bank.

As noted, in one embodiment the program bank agrees to pay a specific rate on the overall MMDA aggregated account balance. The self clearing broker dealer system may compute and then notify the program bank at month end what portion of the agreed upon rate is to be credited to the MMDA as interest and what portion should be paid to the self clearing broker dealer as a fee or revenue. Note that in order to maintain the pass thru on FDIC insurance for the underlying depositors, fee income to the broker dealer BD_(i) or agent on the account is paid separately by the program bank.

Block 280 illustrates an operation of performing by the self clearing broker dealer 100 or an affiliate of the self clearing broker dealer or a third party, by one or more computers, a substantially periodic clearing reconciliation for customer accounts and/or broker dealer accounts and the aggregated accounts in the program banks. In one embodiment, this reconciliation calculates electronically if amounts held in one or more of the aggregated accounts in the plurality of program banks 130-140 equals the amounts held in respective customer accounts. Reconciliation is the process of ensuring that the aggregate balance for customer and/or broker dealer accounts maintained in the database and distributed to the program banks is equal to the aggregate balance maintained at the program banks 130-140. Reconciliation can be taken down to various levels. For example, a reconciliation calculation process may be used to ensure that if a customer account has a balance of $1 million in the program banks, that the sum of the balances listed in the database for that customer as held in the aggregated accounts among the program banks also equals $1 million. Alternatively or in addition, the system can also reconcile by individual broker dealer BD_(1-n) e.g., to ensure that the amount in the customer accounts for that broker dealer BD_(i) distributed to the program banks equal the sum of the amounts associated with that broker dealer BD_(i) in the aggregated accounts at the various program banks. Alternatively or in addition, a reconciliation may be performed for sweep data received and funds transferred during a given period. The type of reconciliation calculation is not limiting on the invention.

In a further embodiment, an operation may be performed of determining by the self clearing broker dealer 100 on a substantially regular basis during a portion of the day a net transaction comprising a net of the sweep data files received over a period of time from a plurality of the broker dealers BD_(i). For example, a net transaction could be calculated at 10 am, 4 pm and 6 pm. The determining electronically the allocation operation of block 250 would then be calculated based on the net of the sweep files received during this period of time.

In a further embodiment, an operation is performed of associating at least one accounting parameter with each of a plurality of the customer accounts and using that parameter in the electronic accounting operation of block 270.

In a further embodiment, an operation is performed of transferring by the self clearing broker dealer 100 of funds to a reserve account if a discrepancy, e.g., out of balance condition, is determined in the reconciliation operation of block 280.

In a further embodiment, the providing at least one instruction operation of block 260 comprises providing by the self clearing broker dealer 100 instructions to the intermediary bank 110 to cause funds to be deposited to a plurality of the program banks so that each of the plurality of the program banks holds funds from a plurality of the broker dealers BD.

In a further embodiment, the providing at least one instruction provided in the operation of block 260 requires use of a method of withdrawal that allows an unlimited number of withdrawals per month from one or more of the program banks 130-140 during a month while preserving an insured and interest-bearing status of the aggregated deposit accounts in the one or more program banks.

In a further embodiment, the method of withdrawal operation with respect to one or more of the program banks is substantially performed only by one or more of the following methods: in person, or by mail, or by messenger, or by telephone and distributed by mail, or by automated teller machine, or a combination thereof so that the insured and interest-bearing status of the aggregated deposit accounts is preserved. In a further embodiment, this restriction to one of the methods listed above does not begin to operate until a threshold number of withdrawals have been made from the aggregated account at the respective program bank. In a yet further embodiment, this restriction to one of the methods listed above for withdrawals made from the aggregated account at the respective program bank is imposed for a substantial portion of a month, and for the remainder of the month, e.g., a remaining 5 days, withdrawals are made by a method that counts against the 6 withdrawal limit, e.g., electronically, such as by wire.

In a further embodiment, the providing of at least one instruction operation of block 260 requires that no more than a predetermined number of withdrawals are made from any one aggregated account in a program bank during a predetermined period of time in order to preserve the interest-bearing status of that program bank. In one embodiment, the predetermined number is 6. Note that in U.S. Pat. No. 5,893,078 to Paulson, which is hereby incorporated by reference in its entirety, after 5 withdrawals from an account, the balance of the account is transferred to a demand deposit account.

In a further embodiment, the providing at least one instruction operation of block 260 requires that after a predetermined number of withdrawals during a predetermined period of time are made from any one aggregated account in a program bank, e.g., 5 in one month, then all of the funds in the account are withdrawn and transferred to another FDIC-insured interest-bearing aggregated account held at a different program bank. By way of example, see U.S. Pat. No. 4,985,833 to Oncken, which is incorporated by reference herein in its entirety

In a further embodiment, the providing at least one instruction operation of block 260 requires that no more than a predetermined number of withdrawals are made from any one aggregated account in a program bank during a predetermined period of time in order to preserve the interest-bearing status of that program bank. For example, in the case where the predetermined number is 6, then the six program banks may be used to ensure that at least one withdrawal may be made every day of a month.

In a further embodiment, the one or more accounting parameters referenced in block 240 comprise a type of rate to be paid one or more customers of the broker dealer BD_(1-n) which may change based on a variety of factors.

In a further embodiment, the one or more accounting parameters referenced in block 240 comprise a tier of a rate chart to be paid on funds of the broker dealer BD_(i) based on a broker dealer rate parameter.

In a further embodiment, the one or more accounting parameters referenced in block 240 comprise one or more levels of FDIC insurance associated with different customers of the broker dealer BD_(i).

In a further embodiment, the one or more accounting parameters referenced in block 240 comprise one or more program banks that are associated with the customer of the broker dealer BD_(i) for transferring funds of that customer, or are prohibited from receiving funds of the customer. For example, one of the customers of a given broker dealer BD_(i) may have elected to not permit his/her funds to be deposited in a given program bank because he/she may already have an account at that bank.

In a further embodiment, the one or more accounting parameters referenced in block 240 comprise one or more program banks that are associated with only a subset of the broker dealers BD_(i) for holding funds of the subset of the broker dealers, or are prohibited from holding funds of the subset of the broker dealers.

In a further embodiment, the one or more accounting parameters referenced in block 240 comprise a preferred method for customer initiated late day transactions. For example, the preferred method may comprise performing a late sweep file operation, where the broker dealer's customers are using checks or a debit card issued by that broker dealer BD_(1-n) or it could comprise a cash performance account that might comprise cash management services such as providing self clearing broker dealer checks, cards, ACH, and/or Automated Bill Pay.

In a further embodiment, an operation is provided of obtaining account data for each of the plurality of program banks relating to their respective FDIC-insured and interest-bearing aggregated deposit account, and using that data to perform the electronic accounting function.

In a further embodiment, an operation is provided of managing deposits and withdrawals from the plurality of program banks to ensure that a minimum amount of deposits is maintained in at least one of the program banks. An embodiment of this feature is described in Ser. No. 11/767,827 filed on Jun. 25, 2007, which is incorporated by reference herein.

In a further embodiment, an operation is provided of replacing at least a portion of funds withdrawn of one of the broker dealers BD_(i) from one of the program banks by depositing funds from another of the broker dealers BD_(i) into the aggregated account held in that program bank. This operation is performed in some embodiments in order to maintain a stable amount at the given program bank.

In a further embodiment, an operation is provided of managing the deposits and withdrawals at the program banks 130-140 to ensure that a respective balance maintained at each of a plurality of the respective program banks is less than or equal to a cap related to assets at the respective program bank.

Among the network of program banks to which funds are to be allocated to obtain FDIC insurance over FDIC limit for one or more single accounts, at least one of those program banks holds aggregated funds of multiple broker dealers BD_(i) in a single aggregated FDIC-insured interest bearing deposit account. In one embodiment, accounting functions and accounting parameters for each of the broker dealers BD_(i) and/or their customers may be linked to the respective customer accounts. For example, a functionality based on broker dealer designated accounting parameters may be linked with the customer account. Thus, the broker dealer BD_(i) or other party such as the self clearing broker dealer may set one or more parameters such as the following:

-   -   The type of rate to be paid to broker dealer customers (for         example, tiered, not tiered);     -   The level of FDIC insurance based on a parameter;     -   Specify the program banks that are available to customers;     -   Specify that a given program bank may be assigned to all broker         dealers BD_(1-n) or may be assigned to only one broker dealer         BD_(i). (Example: a broker dealer BD_(i) may choose to send the         bulk of its customer funds to a sister company that is a bank         unless one of its customer's balance exceeds the current FDIC         limit for insurance);     -   Select a preferred method for customer initiated/late day         deposit or withdrawal transactions, for example, via sending a         late sweep file for situations where the broker dealer BD_(i)         has its own checks or debit cards, or for checks and debits         received by a processing bank in the case where the self         clearing broker dealer 100 has issued its own checks and debit         cards to these customers.

In one embodiment, a sweep interface is provided for insured deposits, which may include in addition to transaction files, one or more of a bookkeeping file and/or acknowledgement file, position files that list the program banks containing customer funds, name and address files for opening or changing accounts, tier/household files (interest and other benefits are determined by the balance of all or substantially all of the accounts of the household), bank deposit files and month end files. The sweep interface is not limited to the files listed above, but may include other files.

Clearing Agreements—In one embodiment, a broker dealer BD_(i) may have a limited clearing arrangement with the self clearing broker dealer 100 for the management of their customers' cash balances. The broker dealer BD_(i) would sweep the customer excess cash balances (either all of the cash balance, or some amount exceeding a predetermined amount, for example) and withdrawals to the control operating account in the intermediary bank 110 that is registered in the name of the self clearing broker dealer or the like. The self clearing broker dealer would then allocate customer balances swept to the control operating account in the intermediary bank 110 for deposit into various program banks 130-140. The broker dealer BD_(i) would have the option to continue to maintain all other clearing functions in this embodiment.

Intermediary Bank—In one embodiment, all funds exchanged between the broker dealers BD_(i) the self clearing broker dealer 100 and the program banks 130-140 would pass-though one control operating account at the intermediary bank 110 registered as “[name of self clearing broker dealer or the like] as agent for the exclusive benefit of its deposit customers.” Note that in other embodiments more than one control operating account could be utilized and more than one intermediary bank could be utilized. Thus, the recitation in the claims of an intermediary bank is intended to encompass one or more such accounts and/or intermediary banks Note that the intermediary bank may also, in some embodiments, be a program bank. Additionally, the intermediary bank, in some embodiments, may be a bank affiliated with the broker dealer BD_(i).

Program Banks—In one embodiment, each program bank 130-140 would include at least one money market deposit account (MMDA)—demand deposit account (DDA) pair, each registered as “[of self clearing broker dealer or the like] as agent for the exclusive benefit of its deposit customers.” The balances from the customers of the participating broker dealers BD_(1-n) that clear thru the self clearing broker dealer 100 are deposited to the aggregated accounts in the different program banks, wherein customer funds from a plurality of broker dealers BD_(1-n) are deposited in the same aggregated account in at least one of the program banks Note that one or more of the program banks may elect to use only an MMDA without pairing it with a DDA. Alternatively, one or more of the program banks may use a Now account by itself for an individual customer, or paired with an MMDA. Alternatively, one or more of the program banks may use a Now account for individual customers paired with an MMDA, and a DDA paired with the same MMDA for institutional customers. Additionally, one or more program banks, in some embodiments, may be affiliated with the broker dealer BD_(i).

Self Clearing Broker Dealer Model

In one embodiment, the self clearing broker dealer offering FDIC sweep programs would maintain minimum net capital and would not be exempt from the requirements of Rule 15c3-3 under the Securities Exchange Act of 1934 pursuant to paragraph (k) thereof. The self-clearing broker dealer would then enter into a limited clearing arrangement with other broker dealers BD_(1-n) for the management of their customers' cash balances. The broker dealer BD_(i) would provide information concerning its customers' excess cash balances to the self clearing broker dealer 100. The self clearing broker dealer would send instructions to the broker dealer as to how customer balances would be allocated and deposited into the various program banks 130-140. The broker dealer would then sweep the customer balances, upon receiving these instructions from the self clearing broker dealer, directly to the intermediary bank. The broker dealer BD_(i) would in this embodiment continue to maintain all other clearing functions.

In one embodiment, the self clearing broker dealer may enter into one or more agreements with the intermediary bank 110 and the program banks 130-140 as may be required by applicable laws, regulations and guidelines. The DDA and MMDA in the respective program banks 130-140 would be registered as “[Name of self clearing broker dealer or the like] 100 as agent for the exclusive benefit of its deposit customers acting for itself and others,” to obtain pass-through FDIC insurance.

The self clearing broker dealer 100 would be the agent of record for the participating deposit customers of the various broker dealers BD. The participating customers via the terms and conditions of their agreement with their respective broker dealer BD_(i) and or the self clearing broker dealer, would agree to appoint the self clearing broker dealer 100 as their agent, thereby granting the self clearing broker dealer 100 permission to move their funds between their customer account at their respective broker dealer BD_(1-n), the intermediary bank 110 and the program banks 130-140.

The self clearing broker dealer 100 is responsible for the daily reconciliation calculation to ensure that its insured deposit sweep program is in balance. If necessary, the self clearing broker dealer 100 could separately reconcile the accounts for each participating broker dealer BD_(i).

The self clearing broker dealer 100 in this embodiment may establish a sweep interface between itself and each participating broker dealer BD_(i). The self clearing broker dealer 100 would be responsible for the movement of funds of the broker dealers BD_(1-n) and would provide clearing services with respect to the participating program banks 130-140. The self clearing broker dealer 100 may also offer additional services such as check writing, debit card, credit card, ACH processing, and/or line bill pay services, to name a few.

Each broker dealer BD_(i) would provide one or more daily sweep files that contains deposits and withdrawals. The self clearing broker dealer 100 processes each sweep file and runs the allocation process on the sweep file by itself, or on a plurality of the sweep files, either at that time, or on a periodic basis, such as every two hours, or at the bank cutoff time. The self clearing broker dealer 100 reviews the most recent allocation output and generates and provides instructions as to the movement of funds between the broker dealers BD_(1-n), the intermediary bank 110 and the program banks 130-140. This process will be discussed in more detail below.

In another version of the allocation program, small accounts (e.g., less than the current FDIC limit for insurance) are initially spread across a substantial number of the program banks. See Ser. No. 12/025,402 filed on Feb. 4, 2008 for details of one embodiment of such small account distribution. In one embodiment, all or substantially all of the program banks receive a portion of the small accounts. When a sweep file is received during the day, for each customer account debit or deposit transaction in the received sweep file, the system selects for the allocation of the transaction one or more program banks that have been allocated or may be allocated funds for that particular customer account based on one or more rules. At the end of an AM sweep period, the system sends instructions to the intermediary bank 110 and the program banks to move the funds based on a net of the deposit and withdrawal allocations to the respective program banks. The process in one embodiment does not try to limit the number of program banks with fund wiring activity. Accordingly, in one embodiment the balances allocated to the different program banks are not set based on a set of bank target balances, but rather can float between a maximum cap and a minimum cap for the respective program banks, based on deposit and debit transactions allocated during the day, e.g., the system may allocate funds with a program bank up to the program bank's maximum cap and withdraw funds down to the program bank's minimum cap. If a program bank has a minimum and maximum cap that are set to be equal, the system in one embodiment will not process a withdrawal or deposit against the program bank unless the system has no other option. After the bank cutoff time, the balances at the respective program banks are fixed for the rest of the day. Note, however that the balance at the holdback bank can change based on PM sweep activity.

The system processes PM sweep files and CPA transactions (checks, debit cards, credit cards, ACH, to name a few) and posts the customer debit and credit transactions to the respective customer accounts. In one embodiment, the system then re-shuffles/reallocates customer accounts among the program banks based on a set of rules, but maintains the respective balances fixed at the program banks at the cutoff time. Any net debit activity from a PM sweep file and/or the aggregate net debit for CPA transactions (checks, debit cards, credit cards, ACH, to name a few) is satisfied from a holdback amount intended for that purpose. Any funds remaining in the control account in the intermediary bank are deposited into the hold back bank. Note that not every customer account that had a debit or credit transaction in the PM sweep file or a CPA transaction has funds in the hold back bank. Thus, a program bank that was initially allocated a customer account may be different from the program bank holding that account at the end of the day after a re-shuffle process.

The self clearing broker dealer 100 is responsible for ensuring that customer funds are properly deposited (in the case of a credit) from the intermediary bank 110 into one or more FDIC insured aggregated accounts in the program banks. The self clearing broker dealer is further responsible for determining that the insured deposit sweep program is in balance, and that all customer funds are properly accounted for as required by federal guidelines and Exchange Act Rule 15c3-3, as currently in effect or as may hereafter may be implemented under the same or different rule numbers. The self clearing broker dealer monitors, calculates and reports net capital on a periodic basis, such as a daily basis, per Exchange Act Rule 15c3-1. Note that Exchange Act Rule 15c3-3 (aka: The Customer Protection Rule) applies to self-clearing broker-dealers and requires a precise identification of customer funds on a daily basis.

Further note that in embodiments the self clearing broker dealer could register with the Securities Information Center as a “Direct Inquirer” for purposes of the Lost and Stolen Securities Program of the Securities and Exchange Commission. Also, the self clearing broker dealer may comply with the possession and control requirements of Exchange Act Rule 15c3-3, as currently in effect or as may hereafter may be implemented under the same or different rule numbers. Books and records required to be kept under federal regulations by self-clearing firms, include but are not limited to a pro form a stock record, Customer Reserve Formula, trial balance (with supports), and net capital computation as of the first day that self-clearing becomes effective.

Note that one or more of the following benefits may potentially be achieved:

-   -   It is in many cases difficult for small broker dealers, e.g.,         those having less than $100 million in deposits, to set up an         insured deposit sweep product because it is difficult to find         enough program banks that are willing to take a small balance         and pay a rate that is equivalent to the rate being paid on the         larger accounts to make the system viable. Thus, the smaller         broker dealer is at a competitive disadvantage. This difficulty         may be eliminated in selected embodiments of the present design.     -   A broker dealer BD_(i) has the option to sign a limited clearing         agreement with the self clearing broker dealer wherein the self         clearing broker dealer only clears for cash sweeps. Thus, the         self clearing broker dealer will clear for cash sweeps, but the         broker dealer BD_(i) can retain clearance responsibility for         other parts of its business, or use a different broker dealer to         clear a portion of its business.     -   Consolidating the movement of funds to include the activity for         all broker dealers BD_(1-n) reduces the number of money         movements. Due to a reduction in the number of transactions,         bank transaction fees are also reduced, as is the potential for         errors.     -   Monthly transaction charges for multiple control operating         accounts in one or more intermediary banks can be reduced in         selected embodiments.     -   Internal Costs may be reduced in some embodiments since         Operations will be tracking one set of bank accounts for         numerous broker dealers BD_(1-n) as opposed to several sets of         segregated accounts for each broker dealer BD_(i).     -   Additionally, one MMDA that contains the assets of several         broker dealers BD_(i) provides more stability for the respective         program bank. The self clearing broker dealer 100 can better         control how the assets are allocated though its modeling process         and can shift assets from other broker dealers BD_(1-n) as         necessary to maintain a stable level of assets at a program         bank.     -   In this same respect, the self clearing broker dealer can better         manage the assets that are allocated to the different program         banks since it is not limited by the broker dealers BD_(i) that         can be attached to a particular program bank. Under the         segregated programs, an individual broker dealer BD_(i) must         have an agreement with the program bank before assets can be         transferred to that program bank.     -   The invention is less costly for the program banks in some         embodiments since they do not have to maintain an MMDA and DDA         pair for each broker dealer BD_(i).     -   The number of legal agreements required between broker dealers         and banks is reduced in some embodiments, as it is no longer         necessary to have a separate agreement between each broker         dealer BD_(i) and the intermediary bank and the program banks         Only one agreement between the self clearing broker dealer 100         and the participating banks is needed. Thus, it is much easier         to add or change an intermediary bank or a program bank, and         legal department agreement negotiation is significantly reduced.         Likewise, the administrator in some embodiments will no longer         have to obtain a separate legal opinion for each new broker         dealer BD_(i) that signs up for an insured deposit sweep         program.     -   The self clearing broker dealer is the self-clearing entity for         the customer cash balances; therefore the self clearing broker         dealer is the party responsible for complying with the federal         guidelines. The broker dealers BD_(1-n) that obtain clearing         services thru the self clearing broker dealer can take advantage         of the bank sweep program that is already setup. The broker         dealer BD_(i) is able to specify key attributes to meet the         needs of its particular broker dealer firm. (e.g., FDIC         Insurance, rate paid, choice of program banks, to name a few.)     -   The broker dealer BD_(i) can experiment with a bank sweep         product without being required to commit extensive resources.         The product could be offered to a limited group of clients in a         specific region or test market or used to recruit         representatives from a major wire house whose customers are         using a bank sweep product. It is as simple as adding the         insured bank product to its choice of sweep products. The self         clearing broker dealer adds the broker dealer BD_(i) to its         system with agreed upon attributes or parameters.     -   Prior to the present invention, a broker dealer BD_(i) that         wished to be self clearing only had the option of setting up a         custom product, which required an extensive amount of work on         the part of the broker dealer BD_(i) and its chosen third party         administrator.

Each broker dealer BD_(i) in the program benefits from the participation of the other broker dealers BD_(i). The self clearing broker dealer can negotiate better rates with program banks when it is dealing with larger pools of assets. Specifically, the program bank knows that the self clearing broker dealer can ensure that a certain percentage of the assets will remain stable. A bank may be willing to pay more for assets that have little or no volatility. Accordingly, the broker dealers BD_(i) are not affected by the program bank's business needs. In contrast, for a custom self clearing program of an individual broker dealer, if a bank decides that it no longer needs the deposits, for example due to excessive volatility, the custom broker dealer may be forced to scramble to find a replacement bank willing to take the assets. In a large program with numerous program banks this typically would not happen, or if it did, the remaining program banks in the system can absorb the deposits of the program bank that decided to withdraw from the program.

First Example Embodiment Self Clearing Broker Dealer Work Flow Daily Processing

-   -   The accounts opened at the intermediary bank 110 and the program         banks 130-140 are registered as “The self clearing broker dealer         100 as Agent for the exclusive benefit of its deposit customers         acting for themselves and others.”     -   All funds flow thru one or a selected set of control operating         accounts in this embodiment.     -   Customer balances of at least some of the participating broker         dealers BD_(1-n) will be deposited in the same program bank         accounts registered as “The Self Clearing Broker Dealer as Agent         for exclusive benefit of its deposit customers acting for         themselves and others.”     -   The Broker Dealers BD_(1-n) set the interest rate paid to their         respective customers.     -   Broker Dealers BD_(1-n) may provide a household tier file for         their customers     -   Broker Dealer's customers may utilize the self clearing broker         dealer's own Cash Performance Account—which may include cash         management services (CPA) provided by the self clearing broker         dealer comprising checks, debit cards, credit cards, ACH, and/or         Automated Bill Pay, to name a few.     -   Broker Dealer BD_(i) may provide both an AM sweep transaction         file and a PM sweep transaction file.         I. Sweep File—AM (received before the bank cutoff time)         Processing Example

A broker dealer BD_(i) provides an AM sweep transaction file to the self clearing broker dealer 100. A settlement is reached between the broker dealer BD_(i) and the self clearing broker dealer as to an amount to be credited or withdrawn. If the net activity is determined in the settlement to be a credit, then

-   -   Broker dealer BD_(i) wires funds to the intermediary bank 110 to         be subsequently dispersed to the program banks by the self         clearing broker dealer 100.     -   Then, at that time or at a later time, the self clearing broker         dealer runs an allocation process based on that sweep file         alone, or on a net of a plurality of sweep files, and generates         and provides bank instructions to the intermediary bank to move         funds to one or more of the program banks     -   In one embodiment the net credit is applied to the program banks         based on a set of rules. The customer accounts are re-allocated         to fit into the updated program bank balances. In one         embodiment, the objective is to limit the activity in the         program banks while providing FDIC insurance for the customer         accounts.     -   In another embodiment, the allocation process selects a program         bank to credit for each transaction based on a set of rules.         Although the net activity for a sweep file or a group of sweep         files is a credit or a debit, the actual bank movements could         comprise deposits to one or more program banks and withdrawals         from one or more program banks. The net activity for all program         banks would be equal to the net activity for the sweep files         processed.

If the net activity in the AM sweep transaction file is determined in the settlement to be a debit, then

-   -   The self clearing broker dealer 100 runs the allocation process         at that time or at a subsequent time based on that sweep file         alone, or on a net of a plurality of sweep files, and generates         and provides bank instructions to one or more of the program         banks to withdraw funds. Funds are then wired by one or more         program banks to the intermediary bank 110. The self clearing         broker dealer 100 instructs the intermediary bank 110 to wire         the funds received from the program banks to the respective         broker dealer(s) BD_(i).     -   Just like the net credit, in one embodiment the net debit is         applied to the program banks based on a set of rules. The         customer accounts are re-allocated to fit into the updated         program bank balances. The objective in this process may also be         to limit the activity in the program banks while providing FDIC         insurance for the customer accounts.     -   Just like for the net debit, in another embodiment the         allocation process selects a program bank to debit for each         transaction based on a set of rules. Although the net activity         for a sweep file or a group of sweep files is a debit, the         actual bank movements could comprise deposits to one or more         program banks and withdrawals from one or more program banks.         The net activity for all program banks would be equal to the net         activity for the sweep files processed.

Prepaid Interest

-   -   The AM sweep file may contain full liquidations that require the         withdrawal of both principle and interest. The program banks do         not prepay interest in mid month. In this embodiment, the self         clearing broker dealer 100 would prepay the interest at the time         of the full liquidation. At month end, the self clearing broker         dealer 100 would reimburse itself for the interest that was         prepaid.     -   In another embodiment the broker dealer prepays the interest for         his clients full liquidations. At month end the self clearing         broker dealer would reimburse the broker dealer for the interest         that was prepaid.     -   In another embodiment interest is not prepaid. Customers cannot         withdraw the interest earned on their account until it is posted         at month end.         II. Modeling Process for One Embodiment

In one embodiment, a modeling process determines minimum and maximum caps for the different program banks and is run after all the AM (pre-cutoff time) sweep files have been processed. The self clearing broker dealer 100 makes any necessary adjustments to the program bank caps. By way of example, this modeling process may be based on such parameters as total program bank assets and the assets of the aggregated account at that program bank. The modeling process also determines whether or not the system needs to add one or more new program banks. In one embodiment, each such program bank is assigned a maximum dollar amount that the system is willing to deposit up to. When a program bank has reached this maximum dollar balance, the modeling process may place a hold on any additional funds being deposited with that program bank. The modeling process may also be used to determine how many banks (at various assets levels) would need to be added if the program is to grow by X.)

III. Program Bank Allocation Process in One Embodiment

The Program Bank Allocation process determines which program banks 130-140 will receive either a deposit or a withdrawal. The allocation process may be run after the processing of a sweep file, or at any other convenient time, e.g., every 2 hours, or after the cutoff time for the banks, and may be based on a single sweep file or on multiple sweep files. Automatic emails are generated for the program banks that have activity, determining either a deposit or a withdrawal. The self clearing broker dealer 100 receives a daily report that includes the net daily activity for each program bank. The self clearing broker dealer 100 approves the allocation and initiates the movement of funds via instructions either to the intermediary bank and/or to one or more program banks or an instruction to the broker dealers.

Program Banks—Withdrawal Example Process

The self clearing broker dealer 100 provides an instruction using a method of instruction transfer to be discussed below. The program bank, upon receipt of the instruction, transfers funds from its MMDA to its DDA. The funds are then wired from the DDA to the intermediary bank 110.

IV. PM (After Bank Cutoff Time) Sweep Transactions & Cash Performance Account Activity

In some embodiments, customer transactions (primarily withdrawals) may be received from some broker dealers BD_(i) after the cutoff time for the programs banks. In this situation, the broker dealer BD_(i) transmits a late file that contains transactions that were processed after the AM cutoff sweep. A second settlement takes place with the broker dealer BD_(i) and funds are moved based on this settlement.

Cash Performance Account—the self clearing broker dealer may provide cash management services (CPA) to the customers of the broker dealers BD_(1-n) which may comprise checks, debit cards, credit cards, ACH, and/or Automated Bill Pay, as noted above.

V. Hold Back Process

Funds are held back from at least one of the program banks in the AM (defined as before the bank cutoff time) allocation(s) to cover late withdrawals. The dollar amount held back is determined based on prior transaction history.

The AM allocation process thus includes the hold back amount, as part of its process. If the net activity for the AM allocation is a credit, the allocation process reduces the deposit to one or more of the program banks by the hold back amount. If the net activity for the AM allocation is a debit, the allocation process increases the dollar amount of the withdrawal by the hold back amount.

If late withdrawals are then received from the broker dealer BD_(i) in a PM (after bank cutoff time) sweep file, the self clearing broker dealer 100 processes the file and wires funds to the broker dealer BD_(i) from the amount that was held back.

If the late withdrawals are Cash Management Services (checks, debits, etc.) provided by the self clearing broker dealer 100, then the self clearing broker dealer 100 processes the transactions, and withdraws funds held back from the control operating account to pay for these Cash Management Service transactions.

Any funds held back but not utilized are deposited into the hold back bank at the end of the day. The PM allocation is run after PM sweep files, check, card and ACH files have been processed. The PM allocation process may also produce an uninsured report. If any accounts with balances below the program limit are uninsured, the re-allocation process may in some embodiment attempt to try to insure the accounts via an account swapping process.

VI. Nightly Process

In one embodiment, the self clearing broker dealer 100 provides the various broker dealers BD_(1-n) with the end of day files including a position file that contains the program banks attached (holding the funds of) to each customer account. The nightly files may be customized for one or more broker dealers. The customer bank deposit file may be provided by the self clearing broker dealer 100 to the program banks and may, in some embodiments, include a customer account number of the associated broker dealer BD_(1-n) a tax ID number, and a balance for that customer at the program bank, to name a few. The self clearing broker dealer updates the accrual for each account as specified by the broker dealer BD_(i).

VII. Daily Reconciliation Software Process

The self clearing broker dealer 100 also reconciles daily with the intermediary bank 110 and each of the program banks 130-140. Any unfavorable differences are included as a customer liability when computing net capital, and as a credit in the broker-dealer's customer reserve computation. A transfer of funds to a reserve account is made to account for any deficiency determined in the reconciliation process.

VIII. Month End Process

The model in one embodiment uses an AM interest posting process at month end. Interest is paid on the morning of the last business day of the period. The self clearing broker dealer 100 then provides each broker dealer BD_(i) with month end statement files per their specifications.

In another embodiment the self clearing broker dealer may post interest for select broker dealers on a day other than the last business day of the period. For example the broker dealer may elect to have interest posts on the 15^(th) of every month or on the 3^(rd) Friday of every month for his clients.

The invention is designed to operate in the context of a system comprising multiple program banks and a self clearing broker dealer. One intent of such an embodiment is to provide interest and FDIC insurance above the current FDIC limit for insurance for a single account for at least some of the customers of various broker dealers BD_(1-n) and in the same system, perform accounting functions on the distribution of funds used to accomplish this intent. In one example embodiment, there could be eleven banks comprising program banks 1-10, and a holdback bank. (The number of banks used in this example is merely for explanatory purposes. More or less program banks can be used and more holdback banks can also be used consistent with the intent of the present invention, and one or more of the holdback banks may be program banks. Also other types of accounts may also be used in conjunction with the bank accounts, such as non-FDIC insured money market accounts to hold excess funds, consistent with the intent of the present invention). In the example, assume that a broker dealer BD_(i) has a program offering $1 million of FDIC insurance per customer account. A customer A of this broker dealer BD_(i) deposits $800,000 with the broker dealer. The system of this embodiment receives sweep data from this broker dealer BD_(i) comprising purchase data and withdrawal data for a plurality of customers of that broker dealer BD_(1-n) including the $800,000 purchase for customer A. These funds are first brought into the system via a control operating account in the intermediary bank 110. The system operates to distribute the purchases across the program banks 130-140. For the case of the $800,000 deposit for customer A, an amount of the current FDIC limit for insurance or less may be distributed to each of a plurality of the program banks to obtain insurance for the $800,000.

In more detail, FIG. 1 discloses one embodiment, comprising a self clearing broker dealer 100 that manages an aggregate interest-bearing account in each of a plurality of program bank 130-140, e.g., a money market deposit account (MMDA). In one embodiment, the MMDA is paired with an aggregate demand deposit account (DDA), both being in the identical name of the self clearing broker dealer or the like (referred to herein as an “MMDA-DDA pair”). In response to customer deposit and withdrawal transactions, sweep files with customer purchase and withdrawal transaction data are generated by the broker dealer BD_(i) and sent to the self clearing broker dealer 100. The self clearing broker dealer 100 reaches a settlement with the broker dealer BD_(i) on the amount of the sweep file net credit or net debit. In the case of a net credit, the broker dealer BD_(i) then wires the net amount to the control operating account in the intermediary bank 110. The self clearing broker dealer 100 then initiates an appropriate transfer of funds from the intermediary bank 110 either to the different program banks 130-140 in the case of a credit to maximize insurance and based on various other rules, or from the program banks in the case of a debit.

As noted, in one embodiment the interest-bearing, insured aggregated accounts in which the managed balances for customers are deposited may be MMDA's each paired with a DDA. If the self clearing broker dealer 100 determines that it is necessary to move funds from a particular MMDA (at a particular program bank), first, it causes a messenger or other mechanism to have these funds transferred from the MMDA to the DDA member of the MMDA-DDA pair, and second, it causes the funds in the DDA to be moved to the self clearing broker dealer's control operating account at the intermediary bank 110. The self clearing broker dealer 100 may send instructions to the intermediary bank to make a further transfer of funds from the control operating account to another party, e.g., the broker dealer BD_(i) or a third party transaction source (preferably by electronic or other automatic means). In contrast, if funds are to be transferred into a particular MMDA, the self clearing broker dealer 100 either may have them deposited into the associated DDA and then moved into the MMDA, or may have the funds deposited directly into the MMDA. The database listing customer funds is updated to reflect these funds transfers.

Note that money market deposit account (MMDA) and demand deposit account (DDA) are set up in each of the program banks so that the customer funds of multiple broker dealers BD_(1-n) are commingled and aggregated in at least one of the program bank accounts, and preferably in multiple of the DDA-MMDA pairs. Thus, the self clearing broker dealer 100 does not have to set up a separate money market deposit account (MMDA) and associated demand deposit account (DDA) for each broker dealer BD_(i) at the program bank, i.e., the same MMDA and/or DDA can be used across multiple broker dealers BD_(i) if registered in the name of and offered by the self clearing broker dealer 100.

As noted above, in one embodiment, the aggregated accounts in the program banks are money market deposit accounts (MMDAs) registered in the name of the self clearing broker dealer 100 or the like that manages the program. However, any other suitable investment accounts may be used, such as NOW accounts for individuals, or DDA's. Moreover, more than one type of account may be used.

In one embodiment of an insured deposit program, multiple sweep files are received from one or more broker dealers BD_(i) associated with the system 100 over the course of a period such as a day. Each sweep file contains transaction activity from one or more broker dealers BD_(i). The timing and content of the received sweep file is determined as a matter of administrative convenience based on how the customer transactions are processed by their respective broker dealers BD_(1-n). In one embodiment, a sweep file may comprise data for deposit and withdrawal transactions for one or more programs in which that broker dealer BD_(i) is participating. Multiple sweep files may be received at the same or different times of the day. Similarly, in another embodiment, a given sweep file may be an aggregation of sweep files from a given broker dealer BD_(i) and various correspondent entities.

An embodiment for processing sweep files will now be described. In one embodiment, each sweep file from a broker dealer BD_(i) may be processed separately and the credits and debits allocated to the accounts of the respective customers associated with the credit and debit transactions. The allocation process may then be run at any time to determine electronically in the case of a credit from the sweep data, an allocation of funds to one or more of the plurality of FDIC-insured and interest-bearing aggregated accounts at the program banks, so that FDIC insurance coverage greater than the maximum FDIC insurance coverage for a single account is effectively provided for at least one customer and to determine electronically, in the case of a debit from the sweep data an allocation, of one or more withdrawals of funds from one or more program banks The allocation process can be run after the processing of each sweep file, or after all the sweep files have been processed, or it could be run at specific times during the processing day (for example every hour). In one embodiment, the allocation process is run after all the AM sweep files (defined as up to the bank cutoff time) have been processed. In a further embodiment, if a broker dealer BD_(i) tended to run late, the system would not hold up the allocation processing for that one broker dealer BD_(i). Rather, the system would run the process with the sweep files that have been received and then rerun the allocation process when the missing file is received.

Note that the instruction generating step does not need to follow immediately after the running of an allocation process. For example, the system could run the allocation process periodically, e.g., every two hours, but the system need not generate the instructions to move the funds between banks until the system had run the final allocation for the sweep files received before the bank cutoff time from the various broker dealers BD_(i).

Processing for a First Sweep File:

-   -   i. First program bank target amount allocation—This process         incorporates the first sweep purchases and redemptions into         respective customer accounts. The process may further include         any pre-paid interest, and holdback accounting. The process then         allocates amounts to the respective program banks associated         with the program based on one or more rules. Such rules may         include, for example, ensuring that a given amount allocated to         a program bank fits within a respective maximum bank cap and a         minimum bank cap set for the respective program bank. In one         embodiment, these allocated amounts may be target balance         amounts that are fixed for the remainder of the period in order         to minimize program bank wires. In such an embodiment, the first         sweep is generally run as close to cutoff time as possible. Note         that in other embodiments, the bank allocation amount may be         fixed as part of a later sweep.     -   ii. A first account allocation—This process then allocates all         customer accounts across the program banks participating in the         system to fit the bank amount allocation above and attempts to         obtain the maximum FDIC insurance under the particular program         or programs associated with the sweep data.     -   iii. In another embodiment the system may spread the small         accounts (less than the current FDIC limit for insurance) across         all of the program banks and the allocation process may allocate         each customer transaction to a specific program bank.

Processing for a subsequent one or more later sweeps:

-   -   i. A second transaction allocation—This processing incorporates         second sweep purchases and redemptions into the respective         customer accounts and then reallocates all accounts across the         program banks to fit the fixed amounts allocated to the         respective program banks.     -   ii. In a different embodiment, the allocation process may         allocate each customer transaction in subsequent sweep files to         a specific program bank without regard to any previously set         fixed amount for the program bank.

As noted in the summary above, the self clearing broker dealer 100 is designed to run a first allocation that comprises two allocation processes: a bank amount allocation process, which allocates fund amounts between/among the banks 130-140, and a customer account balance allocation among the plurality of the program banks to attempt to maximize insurance under the program.

The following describes this process in more detail:

First Bank Amount Allocation:

This process incorporates the first sweep purchases and redemptions into the respective customer accounts. The first bank allocation then assigns fund amounts to the program banks based on various rules, such as fitting within maximum bank caps, minimum bank caps. The process may also include a procedure for handling fully liquidated accounts and may incorporate a “holdback” amount from a holdback process into the bank amount totals.

A holdback process may also be used in one embodiment to receive late day activity (e.g., second dollar sweep data that includes late day customer purchase and withdrawal data). In the hold-back procedure for funding late withdrawals, funds are held back from one or more selected program banks, designated holdback banks, to cover the late withdrawals. A bank may be designated a holdback institution if it agrees to a temporary withdrawal of funds from its account which may be later used to settle late day customer service and fee transactions, for example, transactions for credit/debit cards/checks/ACH/fees, to name a few, that may become available for processing after the daily bank settlement deadline (the time after which the bank will not take new transactions), typically 4:00 pm. The amount held back from pre-cutoff transactions may be estimated based on prior transaction history. The holdback withdrawal process may be factored into the first runs and/or later runs of the bank allocation process on the sweep files. The allocation process will take into account the amount to be held back from a holdback bank in its distribution of funds allocated to or withdrawn from the given holdback bank. In one embodiment, if the net activity is a credit, the aggregate deposit to be allocated to the program banks is reduced by the hold back amount. For example, if the hold back amount is 5 million and the net activity is a credit of 10 million, the process would allocate 5 million to the program banks and leave the other 5 million in the control account in the intermediary bank 110 for late transactions. Any funds not used to cover late transactions would be deposited into the hold back.

To facilitate this process, in one embodiment a daily holdback amount is defined prior to the first bank amount allocation and the first account allocation. As noted, a balance at the holdback bank may either be reduced by the previously defined holdback amount at the end of the first or a later allocation. This money is debited from the holdback bank and wired and is credited to the program's control operating account which, in one embodiment, is held in the intermediary bank 110, which may or may not be a program bank. In a different embodiment, the amount held back in the control operating account for satisfying debits could come from reducing the net deposits to be allocated from the control operating account among the program banks. The account at the intermediary bank could comprise only a DDA control operating account, or it might comprise a DDA control operating account that also has an associated MMDA. The money is ‘held back’ with the intention of offsetting actual redemptions coming in with second or later sweep activity. The amount to be held back correlates, in one embodiment, to the historical transaction activity and/or number of broker dealers receiving clearing services from the self clearing broker dealer, as well as checking account, ACH, debit account activity, and line bill pay services, to name a few. Thus, in one embodiment, a holdback bank is designated and an amount of funds is determined to be held back, either from a deposit allocation to the program banks or by debiting the holdback bank, at least in part, based on a number of broker dealers who are receiving clearing services from the self clearing broker dealer and/or an amount of transaction activity of one or more of the broker dealers being cleared by the self clearing broker dealer.

In one embodiment of the process, all of the program banks in the program (except in some embodiments the holdback bank and/or a safety bank) receive one wire a day as part of the sweep processing and first bank account allocation. The bank balances resulting from the bank amount allocation and account allocation become ‘target balances’ for account allocations for subsequent sweep processing. Note that in some embodiments, the target balances for the aggregated accounts may be set after processing for a later sweep and allocation. Also, note that the use of target balances is one embodiment example, and the present design does not require use of target balances.

Referring to the bank amount allocation process, this allocation process may serve one or more of several purposes, such as, for example, to maintain substantially stable deposit funds at a program bank by the self clearing broker dealer 100 by limiting deposit/withdrawal activity, to ensure that activity at the banks 130-140 comply with federal regulations such as FDIC regulations, to ensure compliance with a credit policy, and to insure compliance with specific rules set by the customer, the broker dealer BD_(1-n), or the branch.

First Account Allocation Processing:

In one embodiment, after the respective purchases and redemptions have been processed, the accounts are grouped by taxpayer identification number (TIN) and sorted in descending order based on total TIN balance (highest to lowest). The allocation proceeds account by account to determine which program banks will receive the customer balance (comprising the day's opening balance for the account, plus first sweep purchases, minus first sweep redemptions for each account). The allocation method distributes the account assets to the Program banks based on the TIN balance and based on the type of allocation business rules set for that customer account. Note that the business rules may be attributed to an account directly at the customer account level, or to multiple accounts at the broker or office/branch level.

The customer account balance allocation/reshuffling step may be subject to various additional account specific rules and broker dealer office and/or branch office level rules. In one embodiment of business rule priority, customer account specific rules may be used first to direct the customer account balance allocation. If the customer has opted out of a particular program bank, for example, because the customer has funds in that bank via an account with another financial entity, or the customer has designated that the first the current FDIC limit for insurance is to be deposited in a particular bank, then the customer account balance allocation will follow these rules in making the allocation of that customer's balance. Then the customer account balance allocation process follows broker dealer office/branch level allocation business rules in allocating multiple accounts of the given broker dealer BD_(i) in an order and amount specified by the applicable rule(s). Thus, the customer account balance allocation process first allocates non-zero balance accounts according to customer account specific rules, then the process follows office/branch level Business Rules in a descending aggregated account balance order. Finally, the customer account balance allocation process allocates non-zero balance accounts not subject to any of the above applicable Business Rules in descending account balance order. The allocation/reshuffling of customer account balances may also follow certain other business rules to minimize the volume of account balance redistributions required to match with the program bank amount allocation. Likewise, a rule may be followed that no more than six withdrawals in a particular manner may be made from a given program bank during a period such as a month. Other allocation rules may be set by the individual account holder, the broker dealer BD_(1-n) and the self clearing broker dealer 100.

Referring again to FIG. 1, the self clearing broker dealer 100 is configured to allocate and manage deposits, withdrawals and other transactions relating to each of the aggregated accounts in each of the program banks 130-140. The self clearing broker dealer system tracks the net activity for the aggregated accounts maintained by the self clearing broker dealer at the program banks 130-140 based on information generated by its own computers, e.g., instructions, wires and other communications, and/or from the sweep files sent by the broker dealers BD_(1-n) to the self clearing broker dealer 100, and/or from other appropriate sources via contract or otherwise. The self clearing broker dealer system 100 maintains records on each broker dealer BD_(i) and their respective customers with funds in one or more of the program banks managed by the self clearing broker dealer 100. Thus, in one embodiment, the self clearing broker dealer 100 maintains account records for all of the customer accounts of the broker dealers BD_(1-n) with funds managed by the self clearing broker dealer 100.

As explained more fully below, the self clearing broker dealer 100 may automatically generate reports, for example, in the form of e-mail messages, text messages, faxes, etc., advising the broker dealers BD_(1-n) of the day's net activity for the aggregated accounts in the multiple program banks holding funds for that broker dealer BD_(1-n) and/or for activity in one or more customer accounts of that broker dealer BD_(i). If more than one aggregated MMDA account is maintained at a given program bank, each account may be settled separately. The self clearing broker dealer 100 maintains or has maintained for it computer software and/or hardware located at a main management system site, or at one or more remote sites that are in communication with the self clearing broker dealer 100, and also maintains databases and other program functions to track the activities in the various aggregated accounts in each of the program banks 130-140. Examples of such computer software and/or hardware will be discussed below.

Subsequent Sweep Processing:

Account Processing:

As noted earlier, there may be multiple sweeps and multiple sweep processes run. When data for a last sweep of the day arrives (referred to in this embodiment as the “second sweep”), the second bank allocation process wires between the control operating account in the intermediary bank 110 and the holdback bank the net of the holdback amount and all second sweep transactions, including:

second sweep purchases

second sweep redemptions.

Reports and wiring instructions are also generated from this process. This second bank allocation process allocates the transactions items to the respective customer accounts. As previously noted, in one embodiment the balances in the program banks from an earlier allocation during the day, or from a previous day, or after the first allocation become the target balances for the account allocation, for the remainder of the period. The second account allocation reallocates or reshuffles the individual accounts to banks to fit the target balances set previously at the respective program banks.

As noted for FIG. 1, the self clearing broker dealer 100 manages the withdrawal of funds from the program banks in order to satisfy a net debit. There are a variety of embodiments of the withdrawal process that may be implemented. In one embodiment, a manner of making the withdrawals from at least one of the FDIC-insured and interest-bearing deposit accounts preserves that account's interest-bearing status regardless of the number of the withdrawals and/or transfers from the at least one of FDIC-insured and interest-bearing aggregated account made during a month. This manner of making embodiment can be implemented by ensuring that no more than some predetermined number of withdrawals are made using a method that implicates the 6 withdrawal limit and that all other withdrawals from that account during the month are made either in person, or by mail, or by messenger, or by telephone and distributed by mail, or by automated teller machine, or a combination thereof so that the insured and interest-bearing status of the aggregated deposit accounts is preserved. As noted, in one embodiment, a restriction to one of the methods listed above for withdrawals made from the aggregated account at the respective program bank is imposed for a substantial portion of a month, but for the remainder of the month, e.g., a remaining 5 days, withdrawals are made by a method that counts against the 6 withdrawal limit, e.g., electronically, such as by wire.

Alternatively, after five withdrawals are made per se, or are made using a method that implicates the 6 withdrawal limit, then all or a portion of the funds in the MMDA can be transferred to a DDA at the same program bank.

Alternatively, a process can be used to ensure that no more than a predetermined number of withdrawals, e.g., 6, are made from the interest-bearing FDIC-insured aggregated account at the program bank during the period. If additional funds are required during the period, they are obtained via a withdrawal from another of the program banks. Accordingly, a withdrawal of funds from the overall program bank group can be made every day of the month, but the process is set to ensure that no more than some number such as 6 withdrawals are made from any one program bank during the period.

FIG. 3 is a block diagram showing an Internet-based self clearing broker dealer system, generally designated by reference number 300, according to an exemplary embodiment of the present invention. It should be appreciated that the aggregated account self clearing broker dealer system 300 according to the present invention need not be Internet-based, but may instead, for example, be part of a closed network that allows limited access to bank and broker dealer records to obtain an enhanced level of security or it may be an open system with other means of security used. The self clearing broker dealer system 300 includes a memory, which may be a distributed memory, and which may comprise one or more databases. In the embodiment illustrated in FIG. 3, the memory comprises a customer database 305 for maintaining a separate account for each of the customers of the broker dealer clients of the self clearing broker dealer, with information on the funds of the customer and how they are distributed among the plurality of program banks 130-140. The memory may further comprise an accounting database 360 that includes parameters to be used in performing various accounting functions relating to the customer accounts, and a database 370 holding information on the various broker dealer clients of the self clearing broker dealer 100. Note that the three databases may be comprised in a single or in multiple memory structures and may be aggregated or separate. The self clearing broker dealer system further comprises a CPU 310 for executing a program bank allocation program 312, a clearing instruction generator program 314 that generates instructions for the intermediary bank 110 and the program banks 130-140 to move funds therebetween, an accounting program 316 for performing one or more accounting functions on the customer accounts and/or the broker dealer accounts including calculating interest, and a reconciliation program 318 for performing a reconciliation function. Program code for updating one or more of the databases based on the output from the accounting program 316 and the allocation program 312 is also provided. The CPU 310 executes code to perform the various management functions of the self clearing broker dealer system 300 and the different programs. The self clearing broker dealer system 300 communicates with the respective computer systems of one or more broker dealers BD_(1-n, the program banks 130-140, and the intermediary bank 110 via one or more electronic portals to manage the aggregated accounts held at each program bank to maximize insurance for the funds in the various customer accounts and/or increase the safety of that money.)

The bank allocation program 312 allocates the net of the deposit data and withdrawal data from the sweep files to the aggregated accounts in the program banks. The system further includes a message generator 320 that generates one or more messages regarding withdrawal of funds from or deposit of funds to each of the aggregated accounts in the program banks (Note that these messages are different from the instructions generated in the instruction generator 314.) Messages may, for example, be in the form of e-mail, facsimile, text message or other form of communication. Such messages may be sent to the broker dealers BD_(1-n) and/or the program banks for providing notice of an action or request for approval of an action. For example, various messages may be exchanged between a respective broker dealer BD_(i) and the self clearing broker dealer in reaching a settlement agreement for a given one or more sweep files. Additionally, messages may be generated that provide information on the amount withdrawn or deposited in various program banks. Additionally, messages may be generated providing information on deposits and withdrawals in individual customer accounts, the interest rate tiers currently being applied, and fund amounts associated with a given broker dealer BD_(i) and the interest that the broker dealer BD_(i) is obtaining based on that fund level.

Additionally, self clearing broker dealer system 300 may include a reporting system 340 for monitoring and generating reports on various aspects of the operation, including the customer account balances deposited in each of the program banks. Additionally, the system 300 may include a display interface 350 with local and/or remote monitoring. Additionally, the self clearing broker dealer system 300 may include communications and miscellaneous interfaces 330. The communications interface could connect to one or more electronic communications networks.

Embodiments within the scope of the present invention include program products comprising machine-readable media for carrying or having machine-executable instructions or data structures stored thereon. Such machine-readable media can be any available media which can be accessed by a general purpose or special purpose computer or other machine with a processor. By way of example, such machine-readable media can comprise RAM, ROM, EPROM, EEPROM, CD-ROM or other optical disk storage, magnetic disk storage or other magnetic storage devices, or any other medium which can be used to store desired program code in the form of machine-executable instructions or data structures and which can be accessed by a general purpose or special purpose computer or other machine with a processor. Combinations of the above are also included within the scope of machine-readable media. Machine-executable instructions comprise, for example, instructions and data which cause a general purpose computer, special purpose computer, or special purpose processing machines to perform a certain function or group of functions.

Embodiments of the invention have been described in the general context of method steps which may be implemented in one embodiment by a program product including machine-executable instructions, such as program code, for example in the form of program modules executed by machines in networked environments. Generally, program modules include routines, programs, objects, components, data structures, etc. that perform particular tasks or implement particular data types. Multi-threaded applications may be used, for example, based on Java or C++. Machine-executable instructions, associated data structures, and program modules represent examples of program code for executing steps of the methods disclosed herein. The particular sequence of such executable instructions or associated data structures represent examples of corresponding acts for implementing the functions described in such steps.

Embodiments of the present invention may be practiced in a networked environment using logical connections to one or more remote computers having processors. Logical connections may include a local area network (LAN) and a wide area network (WAN) that are presented here by way of example and not limitation. Such networked environments are commonplace in office-wide or enterprise-wide computer networks, intranets and the Internet and may use a wide variety of different communication protocols. Those skilled in the art will appreciate that such network computing environments will typically encompass many types of computer system configurations, including personal computers, hand-held devices, multi-processor systems, microprocessor-based or programmable consumer electronics, network PCs, minicomputers, mainframe computers, and the like. Embodiments of the invention may also be practiced in distributed computing environments where tasks are performed by local and remote processing devices that are linked (either by hardwired links, wireless links, or by a combination of hardwired and wireless links) through a communications network. In a distributed computing environment, program modules may be located in both local and remote memory storage devices.

It should be noted that although the flow charts provided herein show a specific order of method steps, it is understood that the order of these steps may differ from what is depicted. Also two or more steps may be performed concurrently or with partial concurrence. Such variation will depend on the software and hardware systems chosen and on designer choice. It is understood that all such variations are within the scope of the invention. Likewise, software and web implementations of the present invention may be accomplished with programming techniques with rule based logic and other logic to accomplish the various database searching steps, correlation steps, comparison steps and decision steps. It should also be noted that the word “component” as used herein and in the claims is intended to encompass implementations using one or more lines of software code, and/or hardware implementations, and/or manual operations.

While this invention has been described in conjunction with the exemplary embodiments outlined above, it is evident that many alternatives, modifications and variations will be apparent to those skilled in the art. Accordingly, the exemplary embodiments of the invention, as set forth above, are intended to be illustrative, not limiting. Various changes may be made without departing from the spirit and scope of the invention. 

1. A method, comprising: (a) maintaining or having maintained or accessing, by one or more computers, an electronic database, on one or more computer readable media, comprising: (i) aggregated deposit account information for one or more of government backed-insured and interest-bearing aggregated deposit accounts, held in one or more depository institutions, comprising at least a first depository institution, each of the one or more aggregated deposit accounts holding funds of more than one client; (ii) client account information for a plurality of client accounts for a plurality of clients whose funds had been accepted for deposit in the names of the respective clients at the first depository institution; (b) obtaining, by the one or more computers, a plurality of net credit/debit amounts during a month period, with each respective net credit/debit amount comprising a sum of credits to and/or debits with respect to multiple of the client accounts for a respective sub-period of the month; (c) allocating, by the one or more computers, fund amounts to the depository institutions to be held in the aggregated deposit accounts therein based at least in part on the credit/debit amounts and one or more rules; (d) generating data, by the one or more computers, for depositing/transferring funds to or withdrawing/transferring funds from at least one of the one or more aggregated deposit accounts multiple times in a month period, based at least in part on one or more of the net credit/debit the fund amounts allocated to the depository institutions for one or more sub-periods of time, the data generating step comprising generating data for instructions for making a withdrawal/transfer from funds held at one of the one or more depository institutions more than six (6) times during the month period, comprising presenting instructions to the respective one depository institution using one or more of the methods: in person, or by mail, or by messenger, or by telephone and distributed by mail, or by automated teller machine, or a combination thereof for substantially all of the withdrawals/transfers except for a set of at least one but not more than six withdrawals within a last six business days of the month period, and presenting instructions to the respective one depository institution using a method that counts against a 6 withdrawal limit for this set of the withdrawals during the last six business days of the month period; and (e) updating or having updated, by the one or more computers, the electronic database to reflect changes in client funds held in the one or more aggregated deposit accounts.
 2. The method as defined in claim 1, wherein the instructions for withdrawal/transfer that count against a 6 withdrawal limit are presented in each of the last 5 business days of the month and are presented by electronic communication.
 3. The method as defined in claim 1, wherein the government backed insurance is Federal Deposit Corporation Insurance.
 4. The method as defined in claim 1, wherein the one or more depository institutions comprises only the first depository institution.
 5. The method as defined in claim 1, wherein the one or more depository institutions comprise a plurality of depository institutions.
 6. The method as defined in claim 1, wherein the one or more depository institutions comprise a plurality of depository institutions, and wherein the generating data for instructions to deposit/transfer funds to or withdraw/transfer funds from the one or more aggregated deposit accounts based at least in part on one or more of the net credit/debit amounts further comprises: transferring funds of a respective client only to one or more depository institutions which hold less than a specified amount of the funds of the respective client account.
 7. A method, comprising: maintaining or having maintained or accessing, by one or more computers, one or more electronic databases, stored on one or more computer-readable media, comprising: (i) aggregated deposit account information for a plurality of respective government-backed insured and interest-bearing aggregated deposit accounts held in a plurality of depository institutions participating in a program, with the aggregated deposit accounts providing non-penalized liquidity for the funds held therein, each of the one or more aggregated deposit accounts holding funds of more than one client; and (ii) client account information for a plurality of client accounts, the client account information for a respective one of the client accounts comprising a balance of client account funds held in each of one or more of the aggregated deposit accounts holding funds of the respective client account; and accessing, by the one or more computers, client account data comprising changes to client account funds sourced to the program from one or more source financial entities and held or to be held in the depository institutions in aggregated accounts held therein; allocating, by the one or more computers, fund amounts to the depository institutions to be held in the aggregated deposit accounts therein based at least in part on the client account data for the client account funds and one or more rules; generating data, by the one or more computers, for depositing/transferring funds to or withdrawing/transferring funds from at least one of the aggregated deposit accounts multiple times in a month period, based at least in part on the accessed client account data, the data generating step comprising generating data for instructions for making a withdrawal/transfer from funds held at one of the depository institutions more than six (6) times during the month period, comprising presenting instructions to the respective one depository institution using one or more of the methods: in person, or by mail, or by messenger, or by telephone and distributed by mail, or by automated teller machine, or a combination thereof for substantially all of the withdrawals/transfers except for a set of at least one but not more than six withdrawals within a last six business days of the month period, and presenting instructions to the respective one depository institution using a method that counts against a 6 withdrawal limit for this set of the withdrawals during the last six business days of the month period; and updating or having updated, by the one or more computers, the one or more electronic databases to reflect changes in client account funds held in the aggregated deposit accounts.
 8. The method as defined in claim 7, wherein the instructions for withdrawal/transfer that count against a 6 withdrawal limit are presented in the last 5 business days of the month and are presented by wire.
 9. The method as defined in claim 7, wherein the method of presentation of the instructions for withdrawal/transfer that counts against the 6 withdrawal limit is by an electronic method.
 10. The method as defined in claim 7, wherein the government backed insurance is from the Federal Deposit Corporation Insurance.
 11. The method as defined in claim 7, wherein one of the one or more rules for allocation comprises allocating funds of a respective client account only to one or more depository institutions which hold less than a specified amount of the funds of the respective client account.
 12. The method as defined in claim 7, wherein one of the one or more rules for allocation comprises allocating funds to respective depository institutions so as not to exceed a maximum cap for the respective depository institution and/or not to go below a minimum cap for the respective depository institution.
 13. The method as defined in claim 7, wherein one of the one or more rules for allocation comprises allocating funds to a respective one of the depository institutions based, at least in part, whether the one depository institution has sourced funds to the program which are held in one or more other of the depository institutions.
 14. The method as defined in claim 7, wherein one of the one or more rules for allocation comprises allocating funds to a respective one of the depository institutions based, at least in part, on an amount of funds the one depository institution has sourced funds to the program which are held in one or more other of the depository institutions.
 15. The method as defined in claim 7, wherein one of the one or more rules for allocation comprises allocating an amount of funds to a respective one of the depository institutions based, at least in part, on an amount of funds the one depository institution has sourced funds to the program which are held in one or more other of the depository institutions.
 16. The method as defined in claim 7, further comprising: allocating, using the one or more computers, fund amounts of client accounts among the aggregated deposit accounts, to substantially match the respective fund amounts allocated to the aggregated deposit accounts, based at least in part on the client account data for the client account funds and one or more rules.
 17. The method as defined in claim 7, wherein the method steps are performed by a self-clearing broker dealer, and wherein the accessing client account data comprises receiving deposit and/or withdrawal sweep data from one or more other broker dealers, with the deposit and/or withdrawal sweep data comprising deposit and/or withdrawal data for respective customers holding customer accounts with the one or more broker dealers.
 18. The method as defined in claim 17, further comprising the self-clearing broker dealer performing the steps: maintaining the plurality of government backed-insured and interest-bearing aggregated accounts in the depository institutions, with at least one of the aggregated accounts at one of the depository institutions holding funds of multiple of the broker dealers; performing, by the one or more computers, an electronic accounting function on a substantially periodic basis based on client account data associated with the respective broker dealers, wherein the electronic accounting function is performed for the client accounts of the associated broker dealer based on one or more accounting parameters associated with the respective broker dealer or the respective customer.
 19. The method as defined in claim 18, wherein the one or more accounting parameters comprise a type of rate to be paid one or more client accounts associated with the respective broker dealer.
 20. The method as defined in claim 18, wherein the one or more accounting parameters comprise a tier of a rate chart to be paid on funds of client accounts associated with the broker dealer.
 21. The method as defined in claim 18, wherein the one or more accounting parameters comprise one or more levels of FDIC insurance associated with client accounts associated with the respective broker dealer.
 22. The method as defined in claim 18, wherein the one or more accounting parameters comprise one or more depository institutions that are associated with the client accounts associated with a respective one of the respective broker dealers for holding funds of those client accounts or are prohibited from holding funds of those client accounts.
 23. The method as defined in claim 18, wherein the one or more accounting parameters comprise one or more of the depository institutions that are associated with only a subset of the broker dealers for holding funds of only the subset of the broker dealers or are prohibited from holding funds of the subset of the broker dealers.
 24. The method as defined in claim 18, wherein the one or more accounting parameters comprise a preferred method for customer initiated/late day transactions.
 25. The method as defined in claim 17, further comprising replacing at least a portion of money withdrawn of one of the broker dealers from one of the depository institutions by depositing money from another of the broker dealers into the one depository institution.
 26. The method as defined in claim 17, further comprising the self clearing broker dealer maintaining an accounting electronic database, on one or more computers, containing information on one or more accounting parameters to be applied when performing accounting functions relating to funds of a plurality of the client accounts of a plurality of the broker dealers.
 27. A method, comprising: maintaining or having maintained or accessing, by one or more computers, one or more electronic databases, stored on one or more computer-readable media, comprising: (i) aggregated deposit account information for a plurality of respective government-backed insured and interest-bearing aggregated deposit accounts held in a plurality of depository institutions participating in a program, with the aggregated deposit accounts providing non-penalized liquidity for the funds held therein, each of the one or more aggregated deposit accounts holding funds of more than one client; and (ii) client account information for a plurality of client accounts, the client account information for a respective one of the client accounts comprising a balance of client account funds held in each of one or more of the aggregated deposit accounts holding funds of the respective client account; and accessing, by the one or more computers, client account data comprising changes to client account funds sourced to the program from one or more source financial entities and held or to be held in the depository institutions in aggregated accounts held therein; allocating, by the one or more computers, fund amounts to the depository institutions to be held in the aggregated deposit accounts therein based at least in part on the client account data for the client account funds and one or more rules; generating, by the one or more computers, data for depositing/transferring funds to or withdrawing/transferring funds from at least one of the aggregated deposit accounts multiple times in a month period, based at least in part on the accessed client account data, the data generating step comprising generating data for instructions for making a withdrawal/transfer from funds held at one of the depository institutions more than six (6) times during the month period, comprising presenting instructions to the respective one depository institution using one or more of the methods: in person, or by mail, or by messenger, or by telephone and distributed by mail, or by automated teller machine, or a combination thereof for substantially all of the withdrawals/transfers except for a set of at least one but not more than six withdrawals within the month period, and presenting instructions to the respective one depository institution using a method that counts against a 6 withdrawal limit for this set of the withdrawals during the month period; and updating or having updated, by the one or more computers, the one or more electronic databases to reflect changes in client account funds held in the aggregated deposit accounts.
 28. The method as defined in 7, wherein the changes to client account funds are sourced from a plurality source financial entities.
 29. The method as defined in 27, wherein the changes to client account funds are sourced from a plurality source financial entities. 